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 January 31, 2006


OR


o
            
            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 incorporation or
                organization)
            (I.R.S.
                Employer 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
o





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





The
      number of shares outstanding of the issuer's classes of common equity, as of
      March 16, 2006, was 105,680,871 shares of Common Stock.





Transitional
      Small Business Disclosure Format (check one): YES o NO
      x









CANWEST
      PETROLEUM CORPORAITON


Index






PART
      I.
      FINANCIAL INFORMATION


PageItem
                  1. Financial Statements of CanWest Petroleum Corporation
              
              1Consolidated
                  Balance Sheets (U.S. Dollars) as at January 31, 2006(UNAUDITED)
                  and April 30, 2005
              
              2Consolidated
                  Statements of Operations (U.S. Dollars)for
                  the nine months ended January 31, 2006and
                  2005 (UNAUDITED)
              
              3Consolidated
                  Statements of Stockholders' Equity (Deficiency) (U.S.
                  Dollars)for
                  the nine months ended January 31, 2006 (UNAUDITED)and
                  the year ended April 30, 2005
              
              4Consolidated
                  Statements of Cash Flows for the nine monthsended
                  January 31, 2006 and 2005 (UNAUDITED)
              
              5Notes
                  to Consolidated Financial Statements for the nine months ended
                  January 31,
                  2006 (UNAUDITED)
              
              6Item
                  2. Management's Discussion and Analysis of Financial Conditions
                  and Plans
                  of Operations
              
              27Item
                  3. Controls and Procedures
              
              32PART
                  II. OTHER INFORMATION
              
              33Item
                  1. Legal Proceedings
              
              33Item
                  2. Changes in Securities; Recent Sales of Unregistered
                  Securities
              
              33Item
                  5. Other Information
              
              33Item
                  6. Exhibits
              
              37Signatures
              
              37







**** **CANWEST
      PETROLEUM CORPORATION**


**(Formerly
      Uranium Power Corporation)**


**(An
      Exploration Stage Company)**


**Consolidated
      Financial Statements**


**For
      The Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**


**(U.S.
      Dollars)**




















1


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Consolidated
      Balance Sheets (U.S. Dollars)**




**January
                  31,**
              
              
              **April
                  30,****2006**
              
              
              **2005****ASSETS**
              
              
              (UNAUDITED)
              
              
              (AUDITED)**Current**Cash
              
              $
              23,998,763
              
              $
              1,022,175Accounts
                  Receivable
              
              
              244,251
              
              
              20,327Exploration
                  Advances and Deposits
              
              
              17,248
              
              
              167,283Share
                  subscription recievable
              
              
              300,000
              
              
              -Prepaid
                  expenses
              
              
              4,268,333
              
              
              -28,828,595
              
              
              1,209,785**Properties**(note
                  4)
              
              
              15,614,256
              
              
              5,773,464**Earth
                  Energy License Agreement**(note
                  10)
              
              
              1
              
              
              1**Investment
                  in Energy 51 Inc.**(note
                  12)
              
              
              310,291
              
              
              310,291**Investment
                  in Uranium Holdings Corporation**(note
                  4b)
              
              
              815
              
              
              815$
              44,753,958
              
              $
              7,294,356**LIABILITIES****Current**Accounts
                  Payable (note 9)
              
              $
              2,841,077
              
              $
              2,029,734Convertible
                  Debentures (note 4(d) and 11)
              
              
              4,238,109
              
              
              876,073Due
                  to Related Parties****(note
                  8)
              
              
              58,062
              
              
              69,6897,137,248
              
              
              2,975,496**Future
                  Income taxes**(Note
                  14)
              
              
              1,050,091
              
              
              142,594**Non-controlling
                  shareholder interest**(Note
                  4(d))
              
              
              4,744,388
              
              
              448,22412,931,727
              
              
              3,566,314**Commitments
                    and contingencies**(notes 2, 4, 5, 6, 7, 8, 9, 11, 13 14, and
                    15)**STOCKHOLDERS'
                  EQUITY****Capital
                  Stock**Authorized250,000,000
                  Common stock with a par value of $0.001 each (note 5)10,000,000
                  Preferred stock with a par value of $0.001 eachIssued105,680,781
                  Common stock (note 5)58,408,661
                  Common stock
              
              
              105,681
              
              
              58,409**Treasury
                  Stock**
              
              
              (23
              )
              
              (23
              )**Additional
                  Paid-in Capital**
              
              
              60,868,444
              
              
              13,835,455**Deficit
                  Accumulated During Exploration Stage**
              
              
              (29,725,272
              )
              
              (9,999,965
              )**Other
                  Comprehensive Income (Loss)**
              
              
              573,401
              
              
              (165,834
              )31,822,231
              
              
              3,728,042$
              44,753,958
              
              $
              7,294,356




**See
      Notes to Consolidated Financial Statements**




2


**CANWEST
      PETROLEUM CORPORATION**


**(Formerly
      Uranium Power Corporation)**


**(An
      Exploration Stage Company)**


**Consolidated
      Statements of Operations (U.S. Dollars)**


**(Unaudited
      - Prepared by Management)**


**Three
                    Months EndedJanuary 31,**
              
              
              **Nine
                    Months EndedJanuary 31,**
              
              
              **From
                    inception**on April 3, 1998 throughJanuary
                    31,**2006**
              
              
              **2005**
              
              
              **2006**
              
              
              **2005**
              
              
              **2006****Expenditures**Non-cash
                  financing expenses
              
              $
              408,899
              
              $
              382,081
              
              $
              6,094,908
              
              $
              1,593,502
              
              $
              8,519,063Consulting
              
              
              6,270,764
              
              
              367,984
              
              
              8,237,411
              
              
              1,341,829
              
              
              10,547,767Exploration
                  costs
              
              
              3,813,360
              
              
              159,359
              
              
              4,885,393
              
              
              360,234
              
              
              6,710,354Advertising
                  and Promotion
              
              
              992,518
              
              
              70,264
              
              
              1,617,775
              
              
              186,204
              
              
              2,491,705Professional
                  Fees
              
              
              217,978
              
              
              50,534
              
              
              405,877
              
              
              199,969
              
              
              1,127,782Interest
                  and Bank Charges
              
              
              303,748
              
              
              26,663
              
              
              461,147
              
              
              124,516
              
              
              629,766Office
              
              
              126,570
              
              
              24,571
              
              
              203,223
              
              
              45,073
              
              
              309,940Transfer
                  Agent Fees
              
              
              27,020
              
              
              14,134
              
              
              82,210
              
              
              38,017
              
              
              161,469Travel
              
              
              37,330
              
              
              8,180
              
              
              74,572
              
              
              22,285
              
              
              225,706Rent
              
              
              29,015
              
              
              7,184
              
              
              58,597
              
              
              19,754
              
              
              134,516Management
                  Fee
              
              
              -
              
              
              18,000
              
              
              -
              
              
              54,000
              
              
              414,602Equity
                  loss from investment
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              19,713Incorporation
                  cost written off
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              700Write
                  down of licence
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              106,507Write-off
                  of Exploration Property
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              856,35912,227,202
              
              
              1,128,954
              
              
              22,121,113
              
              
              3,985,383
              
              
              32,255,949**Other
                  items**Recovery
                  of exploration costs
              
              
              -
              
              
              -
              
              
              (736,782
              )
              
              -
              
              
              (736,782
              )Interest
                  Income
              
              
              (59,096
              )
              
              -
              
              
              (109,835
              )
              
              -
              
              
              (109,835
              )**Loss
                    before income tax expense**(**recovery) and minority
                    interest**
              
              
              12,168,106
              
              
              1,128,954
              
              
              21,274,496
              
              
              3,985,383
              
              
              31,409,332**Income
                  tax expense (recovery)**
              
              
              (38,351
              )
              
              (21,411
              )
              
              (32,651
              )
              
              (21,411
              )
              
              (72,036
              )**Loss
                  before minority interest**
              
              
              12,129,755
              
              
              1,107,543
              
              
              21,241,845
              
              
              3,963,972
              
              
              31,337,296**Minority
                  interest**
              
              
              (1,170,719
              )
              
              (47,197
              )
              
              (1,516,538
              )
              
              (47,197
              )
              
              (1,612,024
              )**Net
                  Loss for period**
              
              $
              10,959,036
              
              $
              1,060,346
              
              $
              19,725,307
              
              $
              3,916,775
              
              $
              29,725,272$
              (0.12
              )
              $
              (0.03
              )
              $
              (0.27
              )
              $
              (0.14
              )Weighted
                  Average Number of Shares
                  Outstanding
              
              
              91,394,612
              
              
              34,768,630
              
              
              73,629,373
              
              
              27,450,214




**See
      Notes to Consolidated Financial Statements**




3




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Consolidated
      Statements of Stockholders' Equity (Deficiency) (U.S.
      Dollars)**


**For
      the Nine Months Ended January 31, 2006 (unaudited) and Year Ended April 30,
      2005**


DeficitAccumulated
              
              
              TotalAdditional
              
              
              Other
              
              
              During
                  the
              
              
              StockholdersCommon
                  Stock
              
              
              Treasury
                  Stock
              
              
              Paid-in
              
              
              Comprehensive
              
              
              Exploration
              
              
              EquityShares
              
              
              par
                  Value
              
              
              Shares
              
              
              Par
                  Value
              
              
              Capital
              
              
              income
                  (loss)
              
              
              Stage
              
              
              (Deficiency)**Balance.
                  April 30, 2004**
              
              
              20,784,838
              
              $
              20,785
              
              
              (23,000
              )
              $
              (23
              )
              $
              2,955,768
              
              $
              (112,564
              )
              $
              (4,890,892
              )
              $
              (2,026,926
              )Common
                  stock issued for:Settlement
                  of debt
              
              
              16,607,161
              
              
              16,607
              
              
              -
              
              
              -
              
              
              3,752,292
              
              
              -
              
              
              -
              
              
              3,768,899Cash
              
              
              3,801,972
              
              
              3,802
              
              
              -
              
              
              -
              
              
              998,555
              
              
              -
              
              
              -
              
              
              1,002,357Services
              
              
              4,436,566
              
              
              4,437
              
              
              -
              
              
              -
              
              
              1,245,290
              
              
              -
              
              
              -
              
              
              1,249,727Property
              
              
              12,778,124
              
              
              12,778
              
              
              -
              
              
              -
              
              
              2,855,441
              
              
              -
              
              
              -
              
              
              2,868,219Stock
                  option compensation expense
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              68,552
              
              
              -
              
              
              -
              
              
              68,552Beneficial
                  conversion feature ofconvertible
                  debentures
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,959,557
              
              
              -
              
              
              -
              
              
              1,959,557Other
                  comprehensive (loss)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (53,270
              )
              
              -
              
              
              (53,270
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (5,109,073
              )
              
              (5,109,073
              )**Balance.
                  April 30, 2005**
              
              
              58,408,661
              
              
              58,409
              
              
              (23,000
              )
              
              (23
              )
              
              13,835,455
              
              
              (165,834
              )
              
              (9,999,965
              )
              
              3,728,042Common
                  stock issued for:Settlement
                  of debt
              
              
              4,845,224
              
              
              4,846
              
              
              -
              
              
              -
              
              
              2,389,462
              
              
              -
              
              
              -
              
              
              2,394,308Cash
              
              
              21,734,155
              
              
              21,733
              
              
              -
              
              
              -
              
              
              26,286,545
              
              
              -
              
              
              -
              
              
              26,308,278Cashless
                    exercise of warrants and options
              9,865,638
              
              
              9,866
              
              
              -
              
              
              -
              
              
              (9,866
              )
              
              -
              
              
              -
              
              
              -Property
              
              
              114,015
              
              
              114
              
              
              -
              
              
              -
              
              
              125,157
              
              
              -
              
              
              -
              
              
              125,271Services
              
              
              10,128,210
              
              
              10,713
              
              
              -
              
              
              -
              
              
              8,351,721
              
              
              -
              
              
              -
              
              
              8,362,434Stock
                  option compensation expense
              
              
              584,878
              
              
              -
              
              
              -
              
              
              -
              
              
              3,795,062
              
              
              -
              
              
              -
              
              
              3,795,062Beneficial
                  conversion feature ofconvertible
                  debentures and warrants
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              6,094,908
              
              
              -
              
              
              -
              
              
              6,094,908Other
                  comprehensive incomeExchange
                  gain on translation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              739,235
              
              
              -
              
              
              739,235Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (19,725,307
              )
              
              (19,725,307
              )**Balance. January
                  31, 2006**
              
              
              105,680,781
              
              $
              105,681
              
              
              (23,000
              )
              $
              (23
              )
              $
              60,868,444
              
              $
              573,401
              
              $
              (29,725,272
              )
              $
              31,822,231


**See
      Notes to Consolidated Financial Statements**





4


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Consolidated
      Statements of Cash Flows (U.S. Dollars)**


**(Unaudited
      - Prepared by Management)** ****


**For
                  the Nine Months   Ended January
                  31,**
              
              
              **From
                  inceptionon April 3, 1998to January
                  31,****2006**
              
              
              **2005**
              
              
              **2006****Operating
                  Activities**Net
                  loss
              
              $
              (19,725,307
              )
              $
              (3,916,775
              )
              $
              (29,725,272
              )Adjustments
                    to reconcile net loss to net cash used operating
                    activitesStock
                  option compensation expenses
              
              
              3,795,062
              
              
              28,395
              
              
              4,106,678Consulting
                  expenses acquired for shares
              
              
              3,777,416
              
              
              969,060
              
              
              5,195,416Exploration
                  costs acquired for shares
              
              
              316,685
              
              
              88,667
              
              
              542,683Recovery
                  of exploration costs
              
              
              (736,782
              )
              
              -
              
              
              (736,782
              )Equity
                  loss from investment
              
              
              -
              
              
              -
              
              
              19,713Non
                  cash financing expense
              
              
              6,094,908
              
              
              1,593,502
              
              
              8,519,063Write-down
                  of exploration property
              
              
              -
              
              
              -
              
              
              856,359Write-down
                  of licence
              
              
              -
              
              
              -
              
              
              106,507Income
                  tax expense (recovery)
              
              
              (32,651
              )
              
              (21,411
              )
              
              (72,036
              )Minority
                  interest
              
              
              (1,516,538
              )
              
              (47,197
              )
              
              (1,612,024
              )Changes
                  in Non-cash Working CapitalAccounts
                  Recievable
              
              
              (373,889
              )
              
              (252,004
              )
              
              (561,499
              )Accounts
                  Payable
              
              
              1,914,125
              
              
              430,164
              
              
              4,458,504(6,486,971
              )
              
              (1,127,599
              )
              
              (8,902,690
              )**Investing
                  Activity**Earth
                  Energy Licence
              
              
              -
              
              
              -
              
              
              (106,508
              )Property
                  acquisitions
              
              
              (9,715,521
              )
              
              (1,385,766
              )
              
              (13,168,510
              )Investment
                  in Energy 51 Inc.
              
              
              -
              
              
              (157,491
              )
              
              (310,291
              )(9,715,521
              )
              
              (1,543,257
              )
              
              (13,585,309
              )**Financing
                  Activities**Issuance
                  of shares for cash
              
              
              26,308,278
              
              
              484,444
              
              
              28,716,671Convertible
                  debentures
              
              
              5,390,344
              
              
              1,622,816
              
              
              8,914,467Common
                  stock returned to treasury
              
              
              -
              
              
              -
              
              
              (15,212
              )Advances
                  from related parties
              
              
              (11,627
              )
              
              4,978
              
              
              653,062Future
                  income taxes
              
              
              940,148
              
              
              189,046
              
              
              1,122,127Non-controling
                  minority interest
              
              
              5,812,702
              
              
              476,050
              
              
              6,356,41238,439,845
              
              
              2,777,334
              
              
              45,747,527**Effect
                  of exchange rate changes on cash**
              
              
              739,235
              
              
              -
              
              
              739,235**Inflow
                  (Outflow) of Cash**
              
              
              22,976,588
              
              
              106,478
              
              
              23,998,763**Cash,
                  Beginning of period**
              
              
              1,022,175
              
              
              348,636
              
              
              -**Cash,
                  End of Period**
              
              $
              23,998,763
              
              $
              455,114
              
              $
              23,998,763**Non-Cash
                  Financing Activitites**Common
                    stock deemed to be issued for resource properties
              
              $
              125,271
              
              $
              19,000
              
              $
              3,462,269Warrants
                    granted on purchase of resource properties
              
              $
              -
              
              $
              -
              
              $
              50,000Common
                  stock issued for services
              
              $
              8,362,434
              
              $
              1,057,727
              
              $
              9,894,101Common
                  stock issued for debt
              
              $
              2,394,308
              
              $
              2,322,698
              
              $
              6,163,207




**See
      Notes to Consolidated Financial Statements**


5




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(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 January 31, 2006 and April 30, 2005 and the results of operations
      for the three and nine months ended January 31, 2006 and the statement of cash
      flows for the three and nine months ended January 31, 2006. The results of
      operations for the nine months ended January 31, 2006 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 66.8% 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


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      Nine Months Ended January 31, 2006**


**(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**




Hocking
                        Lake andHenday
                        LakeProperties
                
                
                Pasquia
                    Hills,Oil Shale Project
                
                
                Firebag,
                      SaskTar Sands Project
                
                
                Eagles
                      Nest,Tar Sands Project(note
                    4(a))
                
                
                (note
                    4(c))
                
                
                (note
                    4(d))
                
                
                (note
                    4(e))
                
                
                TotalBalance
                    April 30, 2004
                
                $
                1
                
                $
                118,455
                
                $
                -
                
                $
                -
                
                $
                118,456Acquisition
                    of property
                
                
                -
                
                
                3,294,237
                
                
                2,360,771
                
                
                -
                
                
                5,655,008Balance
                    April 30, 2005
                
                
                1
                
                
                3,412,692
                
                
                2,360,771
                
                
                -
                
                
                5,773,464Acquisition
                    of property
                
                
                -
                
                
                66,782
                
                
                8,921,551
                
                
                852,459
                
                
                9,840,792Balance January
                    31, 2006
                
                $
                1
                
                $
                3,479,474
                
                $
                11,282,322
                
                $
                852,459
                
                $
                15,614,256


7


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      Nine Months Ended January 31, 2006**


**(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


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      Nine Months Ended January 31, 2006**


**(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. The Company has agreed to acquire all of the remaining shares held by
      the
      non-controlling shareholders through the issuance of 271,876 common shares,
      these shares have not yet been issued.





(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,




9


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**


**4.**
                **PROPERTIES**(continued)





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





2008,
      bears interest at 3%. During the nine months ended January 31, 2006 the
      principal and interest were converted into 788,769 common shares of OQI.





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




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(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 nine months ended January 31, 2006 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 nine months ended January 31, 2006. 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 nine months ended January 31, 2006, 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 nine months ended January 31, 2006, 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




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**4.**
                **PROPERTIES**(continued)


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





expense
      of $125,605 relating to these warrants. During January 2006 OQI issued 320,950
      common shares on the exercise of certain of these agents warrants.





Also
      during the nine months ended January 31, 2006, 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. The Company also entered into a financing agreement with OQI
      whereby it purchased 2,500,000 units for $13,732,047, of which $4,607,468 has
      been allocated to property costs. Each unit consisted 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) until October
      31, 2006. The Company also purchased 571,428 units from a third party for
      $4,932,482, of which $4,069,297 has been allocated to property costs. Each
      unit
      consisted of one common share of OQI and a warrant to purchase an additional
      share. The Company exercised these warrants at a cost of $992,063 and was issued
      an additional 571,428 common shares.




During
      January 2006 OQI issued 400,000 options to its directors to acquire that number
      of common shares at $5.23 ($6 CND) for five years. In conjunction with this
      issuance of options the Company has recorded a $234,393 stock option
      compensation benefit.





As
      at
      January 31, 2006 the Company held 11,729,313 common shares, representing 66.8%
      of the issued and outstanding shares of OQI. The non-controlling shareholders
      33.2% interest in OQI represented $4,744,388 of its net assets.





Subsequent
      to January 31, 2006 OQI issued 328,969 common shares on the conversion of
      $400,000 CND of its convertible debt.




12




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**4.**
              **PROPERTIES**(continued)


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





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, paid during the
      nine months ended January 31, 2006. 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, 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.




13




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**5.**
              **COMMON
                  STOCK**




(a)
              Authorized
                    common shares




During
      the nine months ended January 31, 2006 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.




(c)
            Shares
                issued for services





During
                the nine months ended January 31, 2006 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 Company also issued 5,200,000 common shares pursuant
                to
                consulting agreements, at a deemed cost of $6,940,000, whereby the
                shares
                are earned evenly over a six month period ending May 2006. The deemed
                value of the contracted services not yet earned has been reflected
                in
                prepaid expenses. Also included in consulting expenses is 1,595,000
                common
                shares issued to consultants for services at a deemed cost of $561,715
                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 nine months ended January 31, 2006
      the
      Company issued 33,529 common shares pursuant to these agreements.




14


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**5.**
              **COMMON
                  STOCK**(continued)


(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 nine months ended January 31, 2006 and $233,333 was charged
      to
      exploration expense.




(f)
            Debt
                Settlement





During
      the nine months ended January 31, 2006 the Company settled $366,000 of debt
      owed
      by Western Petrochemicals through the issuance of 850,000 common shares.





(g)
            Private
                Placement





During
      the nine months ended January 31, 2006 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. Pursuant to this placement the Company paid finders $528,870 cash,
      which is included in consulting expenses, plus 260,580 warrants and as yet
      have
      not but may issue an additional 92,000 warrants. The warrants issued to the
      finders are on similar terms as the issued warrants. The Company has recorded
      a
      non-cash financing expense of $407,294 related to the issuance of the warrants
      under this private placement. 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. **** The
      Company has filed the registration statement, but it is not yet effective;
      as
      such $238,247 in penalties has been accrued as of January 31,
      2006.


15





**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**6.**
              **STOCK
                  OPTIONS**


As
      at
      January 31, 2006 the Company had 2,790,000 options outstanding of which
      2,120,555 are exercisable, to purchase that same number of common shares as
      follows:


Stockoption
                  Plan
              
              
              Expiry
                  Date
              
              
              Exercise
                  price
              
              
              Number
                  of  OptionsSOP
                  2000
              
              
              21-Aug-06
              
              $
              0.27
              
              
              150,000SOP
                  2002
              
              
              1-Nov-06
              
              $
              0.36
              
              
              50,000SOP
                  2005
              (a)
              
              1-Nov-06
              
              $
              0.36
              
              
              840,000SOP
                  2005
              (b)
              
              20-Oct-07
              
              $
              1.50
              
              
              400,000SOP
                  2006
              
              
              1-Jan-07
              
              $
              1.70
              
              
              350,000SOP
                  2006
              
              
              1-Jan-08
              
              $
              2.00
              
              
              400,000SOP
                  2006
              
              
              11-Jan-08
              
              $
              2.58
              
              
              600,0002,790,000


During
      the nine months ended January 31, 2006 the Company had the following activity
      pursuant to its stock option plans:





·
            Under
                SOP 2000 plan 600,000 options at $0.27 were exercised on a cashless
                basis
                whereby the Company issued 462,686 common shares in satisfaction
                of the
                exercise and the Company granted a consultant a bonus of $27,000
                to
                exercise 100,000 options;


·
            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 to consultants and 175,000 of
                these
                options were exercised by of the Company granting the consultants
                a bonus
                of $63,000.


·
            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;


·
            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 and 760,000 of these
                options were exercised by of the Company granting the consultants
                a bonus
                of $273,600.






16




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**6.**
              **STOCK
                  OPTIONS (continued)**


·
            On
                October 17, 2005, the Company adopted the 2005(b) Stock Option Plan,
                whereby 2,500,000 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. The Company granted consultants 400,000 options at $1.50 per
                share
                until October 20, 2007, 300,000 options at $1.50 per share until
                October
                20, 2008 which were exercised on a cashless basis during the period
                and
                209,456 shares issued and 250,000 options at $2.00 per share until
                January
                3, 2007 which was exercised on a cashless basis during the period
                and
                149,396 shares issued.


·
            On
                January 3, 2006 the Company adopted the 2006 Stock Option Plan, whereby
                2,500,000 shares of common stock may be optioned. The 2006 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.
                The
                Company granted a consultant 400,000 options at $2.00 per share until
                January 1, 2008, subject to vesting evenly over eighteen months from
                January 1, 2006, another consultant was granted 350,000 options at
                $1.70
                per share until January 1, 2007, subject to vesting evenly over six
                months
                from January 1, 2006 and a director was granted 600,000 options at
                $2.58
                per share until January 1, 2007.





Pursuant
      to the stock option plans there remained 1,550,000 options under the SOP 2005(b)
      plan and 1,150,000 under the SOP 2006 plan available to be issued as at January
      31,2006. The Company has recorded in consulting expenses a stock option
      compensation expense of $3,704,538 relating to the issuance of these options.





Subsequent
      to January 31, 2006 the Company issued 750,000 options to directors under the
      SOP 2006 as to 250,000 at $4.62 expiring February 8, 2008, 250,000 at $4.57
      expiring February 17, 2009 and 250,000 $4.60 expiring March 9,
      2008.




17


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**





**7.**
            **WARRANTS**





The
      Company had the following warrants outstanding, to purchase that same number
      of
      common shares, at January 31, 2006:


Number
                    ofExpiry
                    Date
                
                
                Exercise
                    price
                
                
                Warrants14-Sep-06
                
                $
                0.34
                
                
                2,380,00019-Sep-06
                
                $
                1.30
                
                
                2,370,2079-Jun-07
                
                $
                0.45
                
                
                68,75019-Sep-07
                
                $
                0.55
                
                
                1,817,96712-Dec-07
                
                $
                2.00
                
                
                7,894,58014,531,504
  During the nine months ended January 31, 2006 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.


-
            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. A total of 555 warrants with a November 3, 2005 expiry date
                expired unexercised;


-
            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 all of these warrants were exercised
                for cash proceeds of $681,013;


-
            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;





18




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**





**7.**
            **WARRANTS
                (continued)**





-
            In
                conjunction with the June 9, 2005 convertible note the Company issued
                i)
                500,000 warrants to purchase that same number of common shares at
                $0.45
                until June 9, 2007 of which 431,250 were exercised for cash, ii)
                5,000,000
                warrants to purchase that same number of common shares at $0.55 per
                share
                until June 9, 2007 of which 2,625,000 were exercised for cash and
                the
                balance done on a cashless exercise basis whereby 2,216,685 common
                shares
                were issued and iii) 2,500,000 warrants to purchase that same number
                of
                common shares at $1.50 until June 9, 2007 of which 500,000 were exercised
                for cash and the balance done on a cashless exercise basis whereby
                1,620,005 common shares were issued


-
            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, 2007
                at
                $0.55 per share.


-
            Finally
                in conjunction with a private placement the Company issued 7,894,580
                warrants to purchase that same number of common shares until December
                12,
                2007.





Subsequent
      to January 31, 2006 the Company agreed to issue a consultant a warrant to
      purchase 200,000 common shares at $4.50 per share until February 6,
      2008.




**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 January 31, 2006, $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 nine months ended January 31, 2006
                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.




19





**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**


**8.**
              **RELATED
                  PARTY TRANSACTIONS**




(b)
            United
                Corporate Advisors ("UCA") is related to the Company by way of common
                directors. During the nine months ended January 31, 2006 UCA was
                paid
                consulting fees of $136,462 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 nine months
                ended
                January 31, 2006 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 $16,663 during the nine
                months
                ended January 31, 2006. Also during nine months ended January 31,
                2006 the
                Company agreed to issue this Director on his resignation from the
                board
                50,000 common shares at a deemed cost of $181,000, pay him $30,000
                over
                twelve months and purchase from him, at the then fair market value,
                any
                OQI shares that he acquired as a result of being a director of
                OQI.




(d)
                A
                    private company with a director in common received 1,000,000
                    common shares
                    at a deemed cost of $1,900,000 to provide consulting services
                    to the
                    Company for the six month period ending May
                    2006.


**9.**
              **ACCOUNTS
                  PAYABLE**


Accounts
      payable as at January 31, 2006 includes $127,403 (April 30, 2005 - $130,555)
      in
      advances from third parties. Also included in accounts payable is $200,000
      in
      exploration costs related to the Company’s Pasquia Hills prospect and $90,000 in
      consulting expenses and $80,000 in advertising and promotional costs which
      the
      Company has agreed to settle for 925,000 common shares. Also included in
      accounts payable is $110,513 in finders fees payable in conjunction with the
      cashless exercise of warrants which the Company has agreed to settle for 89,006
      common shares.




**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.




20


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**10.**
              **EARTH
                  ENERGY LICENCE AGREEMENT
                  (continued)**





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.


**11.**
                **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.




21





**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**


**11.**
                  **CONVERTIBLE
                      DEBENTURES****(continued)**





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 January 31, 2006
      is $59,232 as a result of the conversion of $2,397,134 of principal and interest
      into 3,995,224 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 $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
      $982,110.





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.




22




**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**


**11.**
                **CONVERTIBLE
                    DEBENTURES****(continued)**


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. The Company has filed its
      registration statement, but it is not yet effective; as such $238,247 in
      penalties has been accrued as at January 31, 2006.


**12.**
                **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 $78,428
      respectively, in related exploration costs. During the nine months ended January
      31, 2006 the Company has incurred exploration costs related to Sylvan Lake
      in
      the amount of ***$*** 438,574
      and ***$*** 108,073
      related to Barrhead.




23


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**


**13.**
                  **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 nine months ended
      January 31, 2006 the Company has incurred $210,331in costs to the Sulfoxy Joint
      Venture and these have been included in exploration costs.





Pursuant
      to an agreement with a consultant, for the Company’s Pasquia Hills prospect, the
      consultant has the right to convert fees paid and owing to February 28, 2006
      into common shares at $1.70 per share. As at January 31, 2006 and February
      28,
      2006 the Company had incurred fees of $53,335 to this consultant and the
      consultant has requested that these be converted into 30,477 common
      shares.


**14.**
                **FUTURE
                    INCOME TAXES**





The
      following summarizes OQI’s temporary differences that give rise to the future
      Canadian income tax liability:


Book
                  Value of property in excess of tax value
              
              $
              1,285,526Non-capital
                  loss carry-forwards tax benefit
              
              
              (119,474
              )Share
                  issue costs tax benefit
              
              
              (115,961
              )$
              1,050,091


The
      Company has available losses for United States tax purposes of, approximately,
      $8 million that expire from 2010 through 2020.





24


**CANWEST
      PETROLEUM CORPORATION**


**(An
      Exploration Stage Company)**


**Notes
      to Consolidated Financial Statements (U.S. Dollars)**


**For
      the Nine Months Ended January 31, 2006**


**(Unaudited
      - Prepared by Management)**




**15.**
                  **SUBSEQUENT
                      EVENT**


As
      at
      March 9, 2006 the Company adopted a shareholders right plan and reserved 250,000
      of its preferred shares for issuance pursuant to the exercise of the rights.
      The
      rights are designed to have certain anti-takeover effects and as such they
      will
      cause substantial dilution to a person or group that attempts to acquire the
      Company without conditioning the offer on a substantial number of rights being
      acquired, or in a manner or on terms not approved by the board of directors
      of
      the Company. The rights, however, should not deter any prospective offeror
      willing to negotiate in good faith with the board of directors, nor should
      the
      rights interfere with any merger or other business combination approved by
      the
      board of directors. To effect the shareholders rights plan the Company declared
      a distribution of one right to each outstanding share of common stock, payable
      to shareholders of record on March 23, 2006. This right will be attached to
      the
      underlying common share and remain with the common should the common share
      be
      sold or transferred.




25


**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 expects to use a majority 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 nine months ended January 31, 2006 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.





Also
      during the nine months ended January 31, 2006, 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 $125,605 relating to these warrants. During January 2006
      OQI issued 320,950 common shares on the exercise of certain of these agents
      warrants.





The
      Company agreed, during the nine months ended January 31, 2006, 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. The Company also entered into a financing agreement with OQI
      whereby it purchased 2,500,000 units for $13,732,047, of which $4,607,468 has
      been allocated to property costs. Each unit consisted 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) until October
      31, 2006. The Company also purchased 571,428 units from a third party for
      $4,932,482, of which $4,069,297 has been allocated to property costs. Each
      unit
      consisted of one common share of OQI and a warrant to purchase an additional
      share. The Company exercised these warrants at a cost of $992,063 and was issued
      an additional 571,428 common shares.




26




As
      at
      January 31, 2006 the Company held 11,729,313 common shares, representing 66.8%
      of the issued and outstanding shares of OQI. The non-controlling shareholders
      33.2% interest in OQI represented $4,744,388 of its net assets.





During
      December 2005 OQI commenced a twenty-five hole drill program on the Firebag
      Tar
      Sands Prospect and in doing so has incurred exploration costs of $3,305,533
      to
      January 31, 2006. To date OQI has completed twenty of the core holes. The
      results from this drilling program will be released upon completion of the
      program. OQI has also received regulatory approval to proceed with a 150 core
      hole drilling program, known as Phase II, on its Firebag Tar Sands Prospect
      which is expected to start later this year at a cost of approximately $13
      million.





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, paid during the
      nine months ended January 31, 2006. 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, 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.





The
      Company plans to do a drill program on the Eagles Nest Prospect which is
      estimated to cost around $2,000,000 and has incurred ***$*** 153,654 ****** in
      related costs to January 31, 2006.





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.




27







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. The Company has filed its
      registration statement, but it is not yet effective; as such $238,247 in
      penalties has been accrued as at January 31, 2006.





During
      the nine months ended January 31, 2006 the Company continued to evaluate its
      Pasquia Hill Oil Shale Prospect and has spent ***$*** 326,674
      on a small drill program related to the prospect and expects to expend an
      additional $100,000 on drilling during the next three months.





During
      the nine months ended January 31, 2006 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 the Company 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 ***$*** 438,574
      and ***$*** 108,073,
      respectively, in related exploration costs. Subsequent to January 31, 2006
      the
      Sylvan Lake well was abandoned. The Company intends to review prospects of
      merit
      as they come along and to invest in them provided that financing is
      available.





28





Also
      during the nine months ended January 31, 2006 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 January 31, 2006
      is $59,234 as a result of the conversion of $2,397,134 of principal and interest
      into 3,995,224 common shares.





During
      the nine months ended January 31, 2006 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. Pursuant to this placement the Company paid finders $528,870 cash,
      which is included in consulting expenses, plus 260,580 warrants and as yet
      have
      not but may issue an additional 92,000 warrants. The warrants issued to the
      finders are on similar terms as the issued warrants. The Company has recorded
      a
      non-cash financing expense of $407,294 related to the issuance of the warrants
      under this private placement. 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. **** To
      date
      the Company has not yet filed the registration statement and has began accruing
      penalties.




As
      at
      March 9, 2006 the Company adopted a shareholders right plan and reserved 250,000
      of its preferred shares for issuance pursuant to the exercise of the rights.
      The
      rights are designed to have certain anti-takeover effects and as such they
      will
      cause substantial dilution to a person or group that attempts to acquire the
      Company without conditioning the offer on a substantial number of rights being
      acquired, or in a manner or on terms not approved by the board of directors
      of
      the Company. The rights, however, should not deter any prospective offeror
      willing to negotiate in good faith with the board of directors, nor should
      the
      rights interfere with any merger or other business combination approved by
      the
      board of directors. To effect the shareholders rights plan the Company declared
      a distribution of one right to each outstanding share of common stock, payable
      to shareholders of record on March 23, 2006. This right will be attached to
      the
      underlying common share and remain with the common should the common share
      be
      sold or transferred.





29





Changes
      in Financial Condition





During
      the nine months ended January 31, 2006 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 nine months ended January 31, 2005 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 $3,982,896 (2005 - $1,593,502) for the nine months ended January
      31,
      2006. The Company also agreed during the nine months ended January 31, 2006
      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 (2005
      -
      $nil).





Consulting
      expenses for the nine months ended January 31, 2006 of $8,237,411 (2005 -
      $1,341,829) included stock option compensation expenses of $3,795,062 (2005
      -
      $28,395) 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 $1,055,993 (2005 - $nil). The Company
      paid its directors $364,125 (2005 - $147,500). OQI had consulting expenses
      of
      $579,022 that did not occur during the nine months ended January 31, 2005.
      Also
      included in consulting expenses is $2,026,667 (2005 - $ nil) pertaining to
      agreements with financial advisors.





Exploration
      costs for the nine months ended January 31, 2006 were $4,885,393 (2005 -
      $360,234) and included payments related to the Sylvan Lake and Barrhead oil
      and
      gas prospects as to $438,574 and $108,073, respectively. Included in exploration
      costs is $210,331 in conjunction with its interest in the Sulfoxy Joint Venture,
      $153,564 in costs associated with the Eagles Nest prospect, $326,674 in costs
      associated with the Pasquia Hills Oil Shale prospect and $3,303,533 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 and $80,000 pertaining to the
      repurchase of a royalty on the Eagles Nest prospect. The Company’s exploration
      costs during the nine months ended January 31, 2005 were primarily related
      to
      the exploration of its Pasquia Hills Oil Shale Project.




30





Advertising
      and promotion costs during the nine months ended January 31, 2006 of $1,617,775
      were up significantly from the nine months ended January 31, 2005 where they
      were $186,204 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 at a deemed cost of $860,000 of
      which
      $645,000 has been expensed during the nine months ended January 31, 2006 and
      the
      balance is in prepaid expenses. Also included in advertising and promotional
      expenses for the nine months ended January 31, 2006 is $375,750 in finder’s fees
      paid in conjunction with the Company’s financings and $82,731 in advertising and
      promotion paid by OQI.





Professional
      fees for the nine months ended January 31, 2006 of $405,877 (2005 - $199,969)
      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 nine
      months ended January 31, 2006 of $203,223 (2005 - $45,073) have increased
      substantially. Likewise its rent costs for the nine months ended January 31,
      2006 of $58,597 (2005 - $19,754) have increased as a result of maintaining
      the
      two offices.





Interest
      and bank charges of $461,147 (2005 - $124,516) for the nine months ended January
      31, 2006 are higher as a result of the timing when various convertible notes
      and
      interest were issued. Also during the nine months ended January 31, 2006 the
      Company had a significant cash balance on hand as it has pre-funded its
      exploration programs which resulted in interest income of $109,835 (2005 -
      $nil).





During
      the nine months ended January 31, 2006 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 $19,725,307 or $0.27 per share for the
      nine months ended January 31, 2006, compared to a net loss of $3,916,775 or
      $0.14 per share for the nine months ended January 31, 2005. 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.





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 $20,700,000 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**




31





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.








**PART
      II - OTHER INFORMATION**





**Item
      1.**  **Legal
      Proceedings**





On
      January 27, 2006 the Company was served with a cease trade order by the British
      Columbia Securities Commission for failure to file distribution reports
      pertaining to its share issuances.  The Company subsequently made the
      required filings and the cease trade order was revoked on February 27,
      2006.




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





See
      Item
      5 for complete disclosure on equity securities 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.




Except
      as set forth below, 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
        5. Other Information**


The
      following equity securities were sold by the Company during the period covered
      by this report that are not registered under the Securities Act and should
      have
      been reported by the Company on Form 8-K.




On
      January 3, 2006 the Company issued Platinum Partners 381,385 shares of common
      stock pursuant to the conversion of $228,831 of 7% convertible debentures.
      The
      shares were issued in reliance on the exemption from registration contained
      in
      Section (3)(a)(9) of the Act.




32





On
        January 3, 2006 the Company issued common shares under the following stock
        options plans as follows:
  Lorne
                  Inglis
              
              
              SOP
                  2000
              
              
              100,000Monita
                  Faris
              
              
              SOP
                  2002
              
              
              70,000Mark
                  Spencer
              
              
              SOP
                  2002
              
              
              100,000Irene
                  Orr
              
              
              SOP
                  2002
              
              
              5,000Bob
                  Faris
              
              
              SOP
                  2005
              
              
              110,000George
                  Orr
              
              
              SOP
                  2005
              
              
              100,000Bill
                  Timmins
              
              
              SOP
                  2005
              
              
              50,000Thornton
                  Donaldson
              
              
              SOP
                  2005
              
              
              100,000Tim
                  Brock
              
              
              SOP
                  2005
              
              
              400,000


On
      January 3 the Company issued 250,000 options, pursuant to the Company’s 2005(b)
      stock option plan, to Donald Padgett, a consultant, to purchase up to 250,000
      shares of Common Stock at $2.00 per share until January 3, 2007. These options
      were subsequently exercised by way of a cashless conversion on January 25,2006
      and the Company issued 149,396 share of Common Stock. The options and shares
      of
      Common Stock were issued in reliance on the exemption from registration
      contained in Section s 4(2) and 3(a)(9) of the Act.





On
      January 3, 2006 the Company adopted the 2006 Stock Option Plan, whereby
      2,500,000 shares of common stock may be optioned. The 2006 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. The options and shares
      of
      Common Stock under this plan may be issued in reliance on the exemption from
      registration contained in Section (3)(a)(9) of the Act.





On
      January 3, 2006 the Company issued 400,000 options, pursuant to the Company’s
      2006 stock option plan, to Michael Berry, a consultant, to purchase up to
      400,000 shares of Common Stock at $2.00 per share, subject to vesting evenly
      over 18 months from January 1, 2006, until January 1, 2008. The options were
      issued in reliance on the exemption from registration contained in Section
      4(2)
      of the Act.





On
      January 3, 2006 the Company issued 350,000 options, pursuant to the Company’s
      2006 stock option plan, to Jonathan Buick, a consultant, to purchase up to
      350,000 shares of Common Stock at $1.70 per share, subject to vesting evenly
      over 6 months from January 1, 2006, until January 1, 2007. The options were
      issued in reliance on the exemption from registration contained in Section
      4(2)
      of the Act.





On
      January 11, 2006 the Company issued 600,000 options, pursuant to the Company’s
      2006 stock option plan, to Romeo D’Angela, a director, to purchase up to 600,000
      shares of Common Stock at $2.58 per share until January 11, 2008. The options
      were issued in reliance on the exemption from registration contained in Section
      4(2) of the Act.





On
      January 11, 2006 the Company issued J.M. Investors 55,000 shares of common
      stock
      pursuant to the conversion of $33,000 of 7% convertible debentures. The shares
      were issued in reliance on the exemption from registration contained in Section
      (3)(a)(9) of the Act.




33





On
      January 20, 2006 the Company issued Monarch Capital 200,000 shares of Common
      Stock pursuant to the exercise of an equal number of warrants with an expiry
      date of June 7, 2007 for consideration of $300,000. The Company also issued
      Monarch capital 202,403 shares of Common Stock pursuant to the cashless exercise
      of 250,000 warrants with an expiry date of June 7, 2007. The Common Stock were
      issued in reliance on the exemption from registration contained in Section
      4(2)
      and/or 3(a)(9) of the Act.





On
      January 20, 2006 the Company issued Viscount Investments 68,750 shares of Common
      Stock pursuant to the exercise of an equal number of warrants with an expiry
      date of June 7, 2007 for consideration of $30,937.50. The Common Stock was
      issued in reliance on the exemption from registration contained in Section
      4(2)
      of the Act.





On
      January 20, 2006 the Company issued Monarch Capital 6,798 shares of common
      stock
      pursuant to the conversion of $4,078.8 of 7% convertible debentures. The shares
      were issued in reliance on the exemption from registration contained in Section
      (3)(a)(9) of the Act.





On
      January 20, 2006 the Company issued Platinum Partners 22,095 shares of common
      stock pursuant to the conversion of $13,257 of 7% convertible debentures. The
      shares were issued in reliance on the exemption from registration contained
      in
      Section (3)(a)(9) of the Act.





On
      January 20, 2006 the Company issued Platinum Partners 657,810 shares of Common
      Stock pursuant to the cashless exercise of 812,500 warrants with an expiry
      date
      of June 7, 2007. The Common Stock was issued in reliance on the exemption from
      registration contained in Section 3(a)(9) of the Act.





On
      January 24, 2006 the Company issued J.M. Investors 6,798 shares of common stock
      pursuant to the conversion of $4,078.80 of 7% convertible debentures. The shares
      were issued in reliance on the exemption from registration contained in Section
      (3)(a)(9) of the Act.





On
      January 24, 2006 the Company issued J.M. Investors 202,403 shares of Common
      Stock pursuant to the cashless exercise of 250,000 warrants with an expiry
      date
      of June 7, 2007. The Common Stock was issued in reliance on the exemption from
      registration contained in Section 4(2) of the Act.





On
      January 25, 2006 the Company issued each of Steve McGuire, Randy Pow and Mike
      Parker 50,000 shares of Common Stock at a deemed cost of $0.40 for past
      services. The Common Stock was issued in reliance on the exemption from
      registration contained in Section 3(a)(9)  of the Act.





On
      January 25, 2006 the Company issued Alpha Capital 557,389 shares of Common
      Stock
      pursuant to the cashless exercise of 687,500 warrants with an expiry date of
      June 7, 2007. The Common Stock was issued in reliance on the exemption from
      registration contained in Section 3(a)(9) of the Act.





On
      January 25, 2006 the Company issued each of Malcolm Burke and Donald Padgett
      104,728 shares of Common Stock pursuant to the cashless exercise of 300,000
      options granted to them under the Company 2005(b) stock option plan. The Common
      Stock was issued in reliance on the exemption from registration contained in
      Section 3(a)(9) of the Act.





On
      January 25, 2006 the Company issued each of George Orr and Tim Brock 464,742
      shares of Common Stock pursuant to the cashless exercise of 999,900 warrants
      with an expiry date of September 14, 2006. The Common Stock was issued in
      reliance on the exemption from registration contained in Section 3(a)(9) of
      the Act.




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On
      January 25, 2006 the Company issued Larry Thompson 545,298 shares of Common
      Stock pursuant to the cashless exercise of 586,608 warrants with an expiry
      date
      of September 14, 2006. The Common Stock was issued in reliance on the exemption
      from registration contained in Section 3(a)(9) of the
      Act.





On
      February 27, 2006, pursuant to a February 8, 2006 agreement, the Company granted
      250,000 options, pursuant to the Company’s 2006 stock option plan, to Ron
      Phillips, a director, to purchase up to 250,000 shares of Common Stock at $4.62
      per share until February 8, 2008. The options were issued in reliance on the
      exemption from registration contained in Section 4(2) of the Act.





On
      February 27, 2006, pursuant to a February 17, 2006 agreement, the Company issued
      250,000 options, pursuant to the Company’s 2006 stock option plan, to Ron
      Phillips, a director, to purchase up to 250,000 shares of Common Stock at $4.57
      per share until February 17, 2009. The options were issued in reliance on the
      exemption from registration contained in Section 4(2) of the Act.





On
      March
      9, 2006 the Company issued 250,000 options, pursuant to the Company’s 2006 stock
      option plan, to Rod Haverslew, a director, to purchase up to 250,000 shares
      of
      Common Stock at $4.60 per share until March 9, 2008. The options were issued
      in
      reliance on the exemption from registration contained in Section 4(2) of the
      Act.




**Item
      6.**  **Exhibits**




(a)
              Exhibits
 3.1
              (a) Articles
                of Incorporation, as amended(1),
                (2)(3)
 3.2
                Bylaws.(2)
 4.1
                2006
                  Stock Option Plan, filed
                  herewith.




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10.1
            Subscription
                Agreement between the Company and purchasers, dated December 12,
                2005,
                filed herewith.


10.2
              Form
                  of Warrant, dated December 12, 2005, filed
                  herewith.
 10.3
                Financing
                  Agreement with Oilsands Quest, Inc. dated November 25, 2005, filed
                  herewith.
 10.4
                Subscription Agreement with Dynamic Power Hedge
                  Fund dated December 12, 2005, filed
                  herewith.


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 10-QSB, filed December 14,
              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 CORPORATIONDate: ***March
                22, 2006***
              By:
              /s/
                Thornton J.
                DonaldsonThornton
                  J. Donaldson, President,Chief
                Executive Officer, Chief Financial Officer and
                Director





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