UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM 10-K




(Mark
one)


x
            Annual
      Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934


for
the Fiscal Year Ended December 31, 2008


OR


o
            Transition
      Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934


Commission
File Number 000-52034


AMERIWEST
ENERGY CORP.


(Exact
name of registrant as specified in Its Charter)


Nevada
              98-0359930(State
      or other jurisdiction of
              (I.R.S.
      Employerincorporation
      or organization)
              Identification
      No.)
 123
      West 1st
      Ave., Suite 215, Casper, WY 82601(Address
      of Principal Executive Offices)   (zip
  code)


Registrant’s
telephone number, including area code:  (307) 472-5193


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


None
                
                None(Title
      of each class)
                
                (Name
      of each exchange on which
registered)




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


Common
Stock, $0.001 par value


(Title of
class)


Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


YES   ̈
            
            NO  x


Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


YES  o
            
            NO  x


Note -  Checking the
box above will not relieve any registrant required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act from their obligations under those
sections.


Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.


YES  o
            
            NO  x


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




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer, or a small reporting
company.   See definition of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):




Large
      accelerated filer  o
                    Accelerated
      filer  oNon-accelerated
      filer  o
                    Smaller
      reporting company  x




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


YES  o
            
            NO  x




The
aggregate market value of the voting stock held by non-affiliates of the
Registrant as of June 30, 2008 was $25,789,581 (computed
by reference to the last sale price of a share of the registrant’s common stock
on that date as reported by the Over the Counter Bulletin Board). For purposes
of this computation, it has been assumed that the shares beneficially held by
directors and officers of registrant were “held by affiliates”; this assumption
is not to be deemed to be an admission by such persons that they are affiliates
of registrant.




As of
April 14, 2009, there were 61,173,741 shares of common stock
outstanding.





DOCUMENTS
INCORPORATED BY REFERENCE





Exhibits
incorporated by reference are referred under Part IV.





TABLE
OF CONTENTS


PART
      1
                      
                      PageITEM
      1.
                      DESCRIPTION
      OF BUSINESS
                      5ITEM
      1A.
                      RISK
      FACTORS
                      7ITEM
      1B.
                      UNRESOLVED
      STAFF COMMENTS
                      13ITEM
      2.
                      DESCRIPTION
      OF PROPERTY
                      13ITEM
      3.
                      LEGAL
      PROCEEDINGS
                      13ITEM
      4.
                      SUBMISSION
      OF MATTERS TO VOTE OF SECURITIES HOLDERS
                      13PART
      IIITEM
      5.
                      MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
                      14ITEM
      6.
                      SELECTED
      FINANCIAL DATA
                      15ITEM
      7.
                      MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                      15ITEM
      7A.
                      QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                      27ITEM
      8.
                      FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                      27ITEM
      9.
                      CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                      27ITEM
      9(T)A.
                      CONTROLS
      AND PROCEDURES
                      27ITEM
      9B.
                      OTHER
      INFORMATION
                      28PART
      IIIITEM
      10.
                      DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS, COMPLIANCE WITH
      SECTION 16 (a) OF THE EXCHANGE ACT
                      30ITEM
      11.
                      EXECUTIVE
      COMPENSATION
                      31ITEM
      12.
                      SECURITY
      OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDERS MATTERS
                      34ITEM
      13.
                      CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
                      35ITEM
      14.
                      PRINCIPAL ACCOUNTANTS FEES AND
      SERVICES
                      36


2





PART
      IVITEM
      15.
                      EXHIBITS
      AND REPORTS ON FORM 8-K
                      38SIGNATURES
                      
                      40




3


PART
I




ITEM
1. DESCRIPTION OF BUSINESS





Background




Ameriwest
Energy Corp. (the “Company,” “we,” “us,” “our”) was incorporated under the
laws of the State of Nevada on January 3, 2001 under the name Henley Ventures
Inc. for the purpose of acquiring and developing mineral properties. We acquired
certain rights to mineral claims on the Red Bird, Pleasant Surprise and Red Bird
Protection in British Columbia, Canada. The Red Bird is a large claim block
which covers a number of old gold and copper showings, which were first
discovered in the early part of the last century. In July 2006, we commenced
Phase I of the exploration program to undertake further geochemical sampling by
way of the establishment of a grid to obtain soil and rock samples for assaying
as an initial stage. To date, no minerals have yet been discovered on the
properties and certain of our rights to such mineral claims expired in September
2007. On December 15, 2006, we effected a 9-for-1 forward stock split to better
position the company for growth in 2007 and to improve trading liquidity,
broaden ownership, and enhance overall shareholder value.




In May
2007, we decided to concentrate significant efforts on the exploration,
development and production of oil and gas. To facilitate this shift in business
focus, we effected a 3.6-to-1 forward stock split on May 4, 2007, and on June
12, 2007, Henley Ventures, Inc., a Nevada corporation merged with and into its
wholly owned subsidiary, South Sea Energy Corp. resulting in South Sea Energy
Corp. being the surviving corporation. On June 15, 2007, we signed a letter of
intent with CBM Asia Development Corp., (“CBM”) as amended, to acquire 40%
interest in a participation agreement of a coal bed methane project in East
Kalimatan, Indonesia, for $100,000. The letter of intent also provided that our
newly appointed directors and officers receive 26,000,000 shares of our common
stock. The terms of the acquisition were subject to the parties closing the
transaction no later than July 7, 2007. On August 17, 2007, we entered into a
memorandum of understanding for the termination of the negotiations with CBM.
Pursuant to the memorandum of understanding, the 26,000,000 shares issued to our
now former officers and directors were returned to treasury for cancellation and
we relinquished any rights we may have had to the underlying project. At
December 31, 2007, related acquisition costs totaling $209,230 were written
off.




On August
24, 2007, we entered into an assignment agreement with Pin Petroleum Partners
Ltd. (“Pin”), whereby Pin agreed to assign its rights and obligation under a
certain letter of intent with Muddy Minerals, LLC (“Muddy”), to a property
referred to as the South Glenrock “C” oil field, located in Converse County,
Wyoming for the aggregate sum of $550,000. Under the terms of the letter of
intent we assumed, we agreed to acquire the oil field, together with a 78% net
royalty interest in the oil field for the aggregate sum of $5,000,000. In
concert with our intention to focus our business endeavors on the U.S. oil and
gas sector, we appointed a new President and director on August 24, 2007, and on
August 28, 2007, we merged with and into our wholly owned subsidiary, Ameriwest
Energy Corp. resulting in Ameriwest Energy Corp. being the surviving
corporation. On May 31, 2008, we entered into an amendment to the agreement with
Muddy whereby we agreed to amend the terms of the letter of intent as follows:
(i) extend the closing date to September 1, 2008; (ii) $1,750,000 that has been
paid to Muddy is non-refundable and deemed earned by Muddy and shall be credited
toward the purchase price at closing; and (iii) in consideration for extending
the closing date, we agreed to pay Muddy two additional payments in the amounts
of $194,575.34 and $105,424.66, respectively. On September 1, 2008, we entered
into an amendment agreement with Muddy whereby we agreed to amend the terms of
the letter of intent as follows: (i) extend the closing date to December 15,
2008; and (ii) in consideration for extending the closing date, we agreed to pay
Muddy the sum of $100,000 including accrued interest on the remaining payments
calculated from June 1, 2008 through December 15, 2008.





On March
19, 2008, we entered into an exclusive option agreement with Hot Springs
Resources, Ltd. to purchase certain assets of Hot Springs including (i) wells,
well bores, leases, contracts, records, books, equipment, buildings, etc., and
(ii) not less than a working interest of 95% at a 79.9% net revenue interest in
certain acreage inside the Burch Ranch Unit, a working interest of 100% at an
82% net revenue interest in leases outside of the Burch Ranch Unit and all of
Hot Springs’ interest in a leasehold attached to or held by unit, other
formations and hydrocarbon substances, for the aggregate purchase price of
$4,280,000 and the issuance of 400,000 shares of our common stock. The option
expired on September 17, 2008. The parties have a verbal agreement to
renegotiate the terms of the option when financing for the project is
available.


4





On April
15, 2008, we entered into an exclusive option agreement with Alpha Development
Corporation and JK Minerals, Inc. (“Optionors”) to purchase certain assets of
its Cold Creek Unit and adjacent leases including (i) wells, well bores, casing,
leases, contracts, hydrocarbon substances, records, books, documents, licenses,
reports and data, tangible depreciable property and assets such as pumping units
and all equipment used in the production of hydrocarbon substances at Cole
Creek, and (ii) a working interest of about 35% at the net revenue interest that
exists as of April 15, 2008, in all leases and wells in all formations that are
below the base of the Shannon Formation, and the sellers’ working interest in
all depths and formations from the surface to the base of the Shannon Formation
(which was approximately 68% working interest at 77% net revenue interest when
the sellers previously purchased that interest), for the aggregate purchase
price of $10,000,000. On June 25, 2008, we entered into an amendment agreement
with Optionors whereby Optionors agreed to extend the closing of the transaction
to October 30, 2008 provided that we made payments of $200,000 to Optionors no
later than August 18, 2008 and $150,000 no later than September 17, 2008. In the
event we do not exercise the option, such extension payments totaling $350,000
shall be forfeited and retained by Optionors. The option expired on September
17, 2008. The parties have a verbal agreement to renegotiate the terms of the
option when financing for the project is available.





On May 1,
2008, we became the official operator of record for the South Glenrock "C" oil
field and pursuant to an Assignment of Revenues with Muddy, received the right
to all production revenues from the field.




On May
30, 2008 we entered into a Purchase and Sale Agreement with Geochem Exploration,
LLC, a Wyoming limited liability company (“Geochem”) and acquired from Geochem,
100% working interest and 80% net royalty interest in the Skull Valley Prospect
in Tooele County, Utah for the aggregate purchase price of
$400,000.  We
committed to spud, drill and complete a well on the property no later that March
31, 2009. As of the date of this Report, we have not spudded, drilled and
completed a well and as such are in default of our obligations under the
agreement, which will likely result in a reversion of our interest in the
Prospect back to Geochem.





On August
21, 2008, we entered into a Farmout and Area of Mutual Interest (AMI) Agreement
with Tyler Rockies Exploration, Ltd., a Texas limited partnership (“TRE”) where
in consideration for $50,000, we have the right to earn up to a 50% ownership
interest in oil and gas leasehold rights to approximately 2,800 gross acres
within the Geary Prospect lands located in Natrona and Converse counties,
Wyoming. We agreed to commence drilling of a well within the AMI on or before
May 1, 2009. After we have drilled 3 wells to the contract depth of the Dakota
Formation, TRE will assign and convey 50% of its interest in the AMI to us. We
will operate the wells and receive a 75% Net Revenue Interest.





Subsequent
to our fiscal year ended December 31, 2008, on February 25, 2009, we entered
into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation
(“Wold”) where we have the right to earn up to a 100% ownership interest in oil
and gas leasehold rights to approximately 320 net acres within certain land
located in Natrona and Converse counties, Wyoming. We agreed to commence
drilling of a test well within such lands on or before August 1, 2009. After we
have drilled an initial test well to the contract depth of 8,000 feet, Wold will
assign and convey to us, 100% of its interest in the drillsite spacing unit and
participating area, and 65% of its operating rights in the one-half block of the
land where the test well was drilled. We will operate the actual well drilled
and receive a 80% Net Revenue Interest.





Subsequent
to our fiscal year ended December 31, 2008, on March 30, 2009, we entered into
an Agreement to Operate South Glenrock Block “C” And Extension of Purchase
Agreement with Muddy. Under the agreement, both Muddy and we agreed to (i)
extend the closing date to June 1, 2009, (ii) reduce the purchase price to
$4,000,000, (iii) confirm that the amount of $1,750,000 we previously paid
towards the purchase price is non-refundable, (iv) confirm that we shall operate
and manage South Glenrock oilfield until the closing date or upon termination of
the agreement and entitled to all revenue generated from such oilfield, and (v)
assign all our interest in South Glenrock “C” upon termination of the
agreement.




Development




Our
future operations are dependent upon the identification and successful
completion of additional long-term or permanent equity financings, the support
of creditors and shareholders, and, ultimately, the achievement of profitable
operations. There can be no assurances that we will be successful, which would
in turn significantly affect our ability to roll out our business plan. If not,
we will likely be required to reduce operations or liquidate assets. We will
continue to evaluate our projected expenditures relative to our available cash
and to seek additional means of financing in order to satisfy our working
capital and other cash requirements.


5




We
continue to operate with very limited administrative support, and our current
officers and directors continue to be responsible for many duties to preserve
our working capital. We expect no significant changes in the number of employees
over the next 12 months.




Subject
to available financing, we plan to initiate drilling operations in the next
several months, and together with increasing current production, we may have
some significant ongoing capital expenditures. We believe that, with our current
efforts to raise capital, we should have sufficient cash resources to satisfy
our needs over the next twelve months. Our ability to satisfy cash requirements
thereafter will determine whether we achieve our business objectives. Should we
require additional cash in the future, there can be no assurance that we will be
successful in raising additional debt or equity financing on terms acceptable to
our company, if at all.





Dividends





We have
not, and currently do not intend to, pay dividends. Any change in this current
intention is in the discretion of the Board of Directors.





Employees





As of
December 31, 2008, we had two full time employees. We currently utilize
temporary contract labor throughout the year to address business and
administrative needs.





ITEM
1A. RISK FACTORS




Investors
should carefully consider the risks described below before deciding whether to
invest in our common stock. The risks described below are not the only ones we
face. Additional risks not presently known to us or that we currently believe
are immaterial may also impair our business operations and financial results. If
any of the following risks actually occurs, our business, financial condition or
results of operations could be adversely affected. In such case, the trading
price of our common stock could decline and you could lose all or part of your
investment. Our filings with the Securities and Exchange Commission also contain
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks we face described
below. See "Forward-Looking Statements."





RISKS
RELATED TO OUR BUSINESS AND INDUSTRY




The
duration or severity of the current global economic downturn and disruptions in
the financial markets, and their impact on Ameriwest, are
uncertain.


The oil
industry generally is highly cyclical, with prices subject to worldwide market
forces of supply and demand and other influences. The recent global economic
downturn, coupled with the global financial and credit market disruptions, have
had a historic negative impact on the oil industry. These events have
contributed to an unprecedented decline in crude oil prices, weak end markets, a
sharp drop in demand, increased global inventories, and higher costs of
borrowing and/or diminished credit availability. While we believe that the
long-term prospects for oil remain bright, we are unable to predict the duration
or severity of the current global economic and financial crisis. There can be no
assurance that any actions we may take in response to further deterioration in
economic and financial conditions, will be sufficient. A protracted continuation
or worsening of the global economic downturn or disruptions in the financial
markets could have a material adverse effect on our business, financial
condition or results of operations.


6





Our
limited operating history may not serve as an adequate basis to judge our future
prospects and results of operations.


We have a
limited operating history. As such, our historical operating results may not
provide a meaningful basis for evaluating our business, financial performance
and prospects. We may not be able to achieve a similar growth rate in future
periods. Accordingly, you should not rely on our results of operations for any
prior periods as an indication of our future performance. Our success is
significantly dependent on completing planned acquisition and meeting business
objectives. Our operations will be subject to all the risks inherent in the
establishment of a developing enterprise and the uncertainties arising from the
absence of a significant operating history. We may be unable to locate
recoverable reserves or operate on a profitable basis. We are in the initial
stages of developing our oil reserves and have recently begun producing and
selling oil from our recent acquisitions and strategic alliances. If our
business plan is not successful, and we are not able to operate profitably,
investors may lose some or all of their investment in our company.





We
have incurred losses in prior periods and may incur losses in the
future.


We
incurred net losses of $6,606,098 for the period from January 3, 2001
(inception) to December 31, 2008. We cannot be assured that we can achieve or
sustain profitability on a quarterly or annual basis in the future. Our
operations are subject to the risks and competition inherent in the
establishment of a business enterprise. There can be no assurance that future
operations will be profitable. We may not achieve our business objectives and
the failure to achieve such goals would have an adverse impact on
us.





Our
future operating revenue is dependent upon the performance of our
properties.


Our
future operating revenue depends upon our ability to profitably operate our
existing properties by drilling and completing wells that produce commercial
quantities of oil and our ability to expand our operations through the
successful implementation of our plans to explore, acquire and develop
additional properties. The successful development of oil properties requires an
assessment of potential recoverable reserves, future oil and gas prices,
operating costs, potential environmental and other liabilities and other
factors. Such assessments are necessarily inexact. No assurance can be given
that we can produce sufficient revenue to operate our existing properties or
acquire additional oil producing properties and leases. We may not discover or
successfully produce any recoverable reserves in the future, or we may not be
able to make a profit from the reserves that we may discover. In the event that
we are unable to produce sufficient operating revenue to fund our future
operations, we will be forced to seek additional, third-party funding, if such
funding can be obtained. Such options would possibly include debt financing,
sale of equity interests in the Company, joint venture arrangements, or the sale
of oil and gas interests. If we are unable to secure such financing on a timely
basis, we could be required to delay or scale back our operations. If such
unavailability of funds continued for an extended period of time, this could
result in the termination of our operations and the loss of an investor’s entire
investment.





If we are unable to obtain additional
funding our business operations will be harmed and if we do obtain additional
financing our then existing shareholders may suffer substantial dilution.


We will
require additional funds to continue our oil exploration and production
activities, and to take advantage of any available business opportunities.
Historically, we have financed our expenditures primarily with proceeds from the
sale of debt and equity securities, and bridge loans from our officers and
stockholders. In order to meet our obligations or acquire an operating business,
we will have to raise additional funds. Obtaining additional financing will be
subject to market conditions, industry trends, investor sentiment and investor
acceptance of our business plan and management. These factors may make the
timing, amount, terms and conditions of additional financing unattractive or
unavailable to us. If we are not successful in achieving financing in the amount
necessary to further our operations, implementation of our business plan may
fail or be delayed.





Any failure to
meet our debt obligations or the occurrence of a continuing default under our
debt instruments would adversely affect our business and financial condition.


We have
issued both short and long term promissory notes totaling approximately
$3,236,946 and we anticipate additional debt obligations to finance our business
objectives. Our ability to meet our current and future debt obligations and
other expenses will depend on our future performance, which will be affected by
financial, business, economic, regulatory and other factors, many of which we
are unable to control.  If our cash flow is not sufficient to service our
debt, we may be required to refinance the debt, sell assets or sell shares of
common stock on terms that we do not find attractive, if it can be done at
all.





We
own rights to oil properties that have not yet been developed.


We own
rights to oil properties that have limited or no development. There are no
guarantees that our properties will be developed profitably or that the
potential oil resources on the property will produce as expected if they are
developed.




7


Inability
of Our Officers and Directors to Devote Sufficient Time to the Operation of the
Business May Limit Our Success.


Presently,
our officers and directors allocate only a portion of their time to the
operation of our business. If the business requires more time for operations
than anticipated or the business develops faster than anticipated, the officers
and directors may not be able to devote sufficient time to the operation of the
business to ensure that it continues as a going concern. This lack of sufficient
time of our management may result in limited growth and success of the
business.





If
we are unable to successfully recruit qualified managerial and field personnel
having experience in oil and gas exploration, we may not be able to execute on
our business plan.


In order
to successfully implement and manage our business plan, we will be dependent
upon, among other things, successfully recruiting qualified managerial and field
personnel having experience in the oil and gas exploration business. Competition
for qualified individuals is intense. There can be no assurance that we will be
able to find, attract and retain existing employees or that we will be able to
find, attract and retain qualified personnel on acceptable terms.





Inherent risk in
drilling


Drilling
for oil involves numerous risks, including the risk that we will not encounter
commercially productive oil reservoirs. The wells we drill or participate in may
not be productive and we may not recover all or any portion of our investment in
those wells. The seismic data and other technologies we use do not allow us to
know conclusively prior to drilling a well that crude is present or may be
produced economically. The costs of drilling, completing and operating wells are
often uncertain, and drilling operations may be curtailed, delayed or canceled
as a result of a variety of factors including, but not limited to:




•
              unexpected
      drilling conditions;•
              pressure
      or irregularities in formations;•
              equipment
      failures or accidents;•
              mechanical
      difficulties, such as lost or stuck oil field drilling and service
      tools;•
              fires,
      explosions, blowouts and surface cratering;•
              uncontrollable
      flows of oil and formation water;•
              environmental
      hazards, such as oil spills, pipeline ruptures and discharges of toxic
      gases;•
              other
      adverse weather conditions; and•
              increase
      in the cost of, or shortages or delays in the availability of, drilling
      rigs and equipment.




Certain
future drilling activities may not be successful and, if unsuccessful, this
failure could have an adverse effect on our future results of operations and
financial condition. While all drilling, whether developmental or exploratory,
involves these risks, exploratory drilling involves greater risks of dry holes
or failure to find commercial quantities of hydrocarbons.




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


The oil
and gas industry is intensely competitive. We compete with numerous individuals
and companies, including many major oil and gas companies which have
substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for desirable leases,
suitable properties for drilling operations and necessary drilling equipment, as
well as for access to funds. We cannot predict if the necessary funds can be
raised or that any projected work will be completed.


8





Our
oil operations involve substantial costs and are subject to various economic
risks.


Our oil
operations are subject to the economic risks typically associated with
exploration, development and production activities, including the necessity of
significant expenditures to locate and acquire producing properties and to drill
exploratory wells. The cost and length of time necessary to produce any reserves
may be such that it will not be economically viable. In conducting exploration
and development activities, the presence of unanticipated pressure or
irregularities in formations, miscalculations or accidents may cause our
exploration, development and production activities to be unsuccessful. In
addition, the cost and timing of drilling, completing and operating wells is
often uncertain. We also face the risk that the oil reserves may be less than
anticipated, that we will not have sufficient funds to successfully drill on the
property, that we will not be able to market the oil due to a lack of a market
and that fluctuations in the prices of oil will make development of those leases
uneconomical. This could result in a total loss of our investment.





A
substantial or extended decline in oil and gas prices may adversely affect our
business, financial condition, cash flow, liquidity or results of operations as
well as our ability to meet our capital expenditure obligations and financial
commitments to implement our business plan.


Any
revenues, cash flow, profitability and future rate of growth we achieve will be
greatly dependent upon prevailing prices for oil and gas. Our ability to
maintain or increase our borrowing capacity and to obtain additional capital on
attractive terms is also expected to be dependent on oil and gas prices.
Historically, oil and gas prices and markets have been volatile and are likely
to continue to be volatile in the future. Prices for oil and gas are subject to
potentially wide fluctuations in response to relatively minor changes in supply
of and demand for oil and gas, market uncertainty, and a variety of additional
factors beyond our control. Those factors include:


•
              the
      domestic and foreign supply of oil and natural gas;•
              the
      ability of members of the Organization of Petroleum Exporting Countries
      and other producing countries to agree upon and maintain oil prices and
      production levels;•
              political
      instability, armed conflict or terrorist attacks, whether or not in oil or
      natural gas producing regions;•
              the
      level of consumer product demand;•
              the
      growth of consumer product demand in emerging markets, such as China and
      India;•
              weather
      conditions, including hurricanes and other natural occurrences that affect
      the supply and/or demand of oil and natural gas;•
              domestic
      and foreign governmental regulations and other actions;•
              the
      price and availability of alternative fuels;•
              the
      price of foreign imports;•
              the
      availability of liquid natural gas imports; and•
              worldwide
      economic conditions.




These
external factors and the volatile nature of the energy markets make it difficult
to estimate future prices of oil and natural gas. Lower oil and natural gas
prices may not only decrease our revenues on a per unit basis, but may also
reduce the amount of oil we can produce economically, if any. A substantial or
extended decline in oil and natural gas prices may materially affect our future
business, financial condition, results of operations, liquidity and borrowing
capacity, and may require a reduction in the carrying value of our oil
properties. While our revenues may increase if prevailing oil and gas prices
increase significantly, exploration and production costs and acquisition costs
for additional properties and reserves may also increase.




Governmental
and environmental regulations could adversely affect our business.


Our
business is subject to federal, state and local laws and regulations on
taxation, the exploration for and development, production and marketing of oil
and safety matters. Many laws and regulations require drilling permits and
govern the spacing of wells, rates of production, prevention of waste,
unitization and pooling of properties and other matters. These laws and
regulations have increased the costs of planning, designing, drilling,
installing, operating and abandoning our oil wells and other facilities. In
addition, these laws and regulations, and any others that are passed by the
jurisdictions where we have production, could limit the total number of wells
drilled or the allowable production from successful wells, which could limit our
revenues.


9





Our
operations are also subject to complex environmental laws and regulations
adopted by the various jurisdictions in which we have or expect to have oil
operations. We could incur liability to governments or third parties for any
unlawful discharge of oil or other pollutants into the air, soil or water,
including responsibility for remedial costs. We could potentially discharge
these materials into the environment in any of the following ways:





•
              from
      a well or drilling equipment at a drill site;•
              from
      gathering systems, pipelines, transportation facilities and storage
      tanks;•
              damage
      to oil wells resulting from accidents during normal operations;
      and•
              blowouts,
      cratering and explosions.




Because
the requirements imposed by laws and regulations are frequently changed, we
cannot assure you that laws and regulations enacted in the future, including
changes to existing laws and regulations, will not adversely affect our
business. In addition, because we acquire interests in properties that have been
operated in the past by others, we may be liable for environmental damage caused
by the former operators.




Title
to the properties in which we have an interest may be impaired by title
defects.


Our
general policy is to obtain title opinions on significant properties that we
drill or acquire. However, there is no assurance that we will not suffer a
monetary loss from title defects or title failure. Additionally, undeveloped
acreage has greater risk of title defects than developed acreage. Generally,
under the terms of the operating agreements affecting our properties, any
monetary loss is to be borne by all parties to any such agreement in proportion
to their interests in such property. If there are any title defects or defects
in assignment of leasehold rights in properties in which we hold an interest, we
will suffer a financial loss.




The
unavailability or high cost of drilling rigs, equipment, supplies, personnel and
oil field services could adversely affect our ability to execute our exploration
and development plans on a timely basis and within our budget.


Our
industry is cyclical and, from time to time, there is a shortage of drilling
rigs, equipment, supplies or qualified personnel. During these periods, the
costs and delivery times of rigs, equipment and supplies are substantially
greater. In addition, the demand for, and wage rates of, qualified drilling rig
crews rise as the number of active rigs in service increases. As a result of
increasing levels of exploration and production in response to strong prices of
oil and natural gas, the demand for oilfield services and equipment has risen,
and the costs of these services and equipment are increasing. If the
unavailability or high cost of drilling rigs, equipment, supplies or qualified
personnel were particularly severe in Wyoming, we could be materially and
adversely affected because our operations and properties are concentrated in
Wyoming.




We
depend on the skill, ability and decisions of third party operators to a
significant extent.


The
success of the drilling, development and production of the oil properties in
which we have or expect to have a working interest is substantially dependent
upon the decisions of such third-party operators and their diligence to comply
with various laws, rules and regulations affecting such properties. The failure
of any third-party operator to make decisions, perform their services, discharge
their obligations, deal with regulatory agencies, and comply with laws, rules
and regulations, including environmental laws and regulations in a proper manner
with respect to properties in which we have an interest could result in material
adverse consequences to our interest in such properties, including substantial
penalties and compliance costs. Such adverse consequences could result in
substantial liabilities to us or reduce the value of our properties, which could
negatively affect our results of operations.


10





We are subject to
risks arising from the failure to fully identify potential problems related to
acquired reserves or to properly estimate those
reserves.


Although
we perform a review of the acquired properties that we believe is consistent
with industry practices, such reviews are inherently incomplete. It generally is
not feasible to review in depth every individual property involved in each
acquisition. Ordinarily, we will focus our review efforts on the higher-value
properties and will sample the remainder, and depend on the representations of
previous owners. However, even a detailed review of records and properties may
not necessarily reveal existing or potential problems, nor will it permit a
buyer to become sufficiently familiar with the properties to assess fully their
deficiencies and potential. Inspections may not always be performed on every
well, and environmental problems, such as ground water contamination, are not
necessarily observable even when an inspection is undertaken. Even when problems
are identified, we often assume certain environmental and other risks and
liabilities in connection with acquired properties. There are numerous
uncertainties inherent in estimating quantities of proved oil reserves and
actual future production rates and associated costs with respect to acquired
properties, and actual results may vary substantially from those assumed in the
estimates.





If we grant
employee share options and other share-based compensation, our net income could
be adversely affected.


If we
grant share purchase options to directors and employees, we will account for
options granted in accordance with FASB Statement No. 123 (Revised 2004),
“Share-Based Payments,” or SFAS 123R, which requires all companies to recognize,
as an expense, the fair value of share options and other share-based
compensation to employees. As a result, if we were to grant options to directors
and employees, we would have to account for compensation costs for all share
options using a fair-value based method and recognize expenses in our
consolidated statement of operations in accordance with the relevant rules under
U.S. GAAP, which may have a material and adverse effect on our reported
earnings. If we try to avoid incurring these compensation costs, we may not be
able to attract and retain key personnel, as share options are an important
employee recruitment and retention tool. If we grant employee share options or
other equity incentive based compensation, our net income could be adversely
affected.





We
are subject to new corporate governance and internal control reporting
requirements, and our costs related to compliance with, or our failure to comply
with existing and future requirements, could adversely affect our
business.


We may
face new corporate governance requirements under the Sarbanes-Oxley Act of 2002,
as well as new rules and regulations subsequently adopted by the SEC and the
Public Company Accounting Oversight Board. These laws, rules and regulations
continue to evolve and may become increasingly stringent in the future. In
particular, under rules proposed by the SEC on August 6, 2006 we are required to
include management's report on internal controls as part of our annual report
pursuant to Section 404 of the Sarbanes-Oxley Act. Furthermore, under the
proposed rules, an attestation report on our internal controls from our
independent registered public accounting firm will be required as part of our
annual report for the fiscal year ending December 31, 2009. We strive to
continuously evaluate and improve our control structure to help ensure that we
comply with Section 404 of the Sarbanes-Oxley Act. The financial cost of
compliance with these laws, rules and regulations is expected to remain
substantial. We cannot assure you that we will be able to fully comply with
these laws, rules and regulations that address corporate governance, internal
control reporting and similar matters. Failure to comply with these laws, rules
and regulations could materially adversely affect our reputation, financial
condition and the value of our securities.





Our
Independent Auditors’ Report States that there is a Substantial Doubt that we
will be able to Continue as a Going Concern.


Our
independent auditors, Malone & Bailey, PC, state in their audit report,
dated April 11, 2008 that since we have not established a source of revenue and
future operations are dependent on our ability to raise capital from
shareholders or other sources, there is a substantial doubt that we will be able
to continue as a going concern. Our ability to continue as a going concern is an
issue raised as a result of recurring losses from operations. We continue to
experience net operating losses. Our ability to continue as a going concern is
subject to our ability to obtain necessary funding from outside sources,
including obtaining additional funding from the sale of our securities. Our
continued net operating losses increase the difficulty in meeting such goals and
there can be no assurances that such methods will prove successful.





RISK
RELATING TO OUR COMMON STOCK:





Nevada
law and our articles of incorporation authorize us to issue shares of stock,
which shares may cause substantial dilution to our existing shareholders and/or
have rights and preferences greater than our common stock.


Pursuant
to our Articles of Incorporation, we have, as of the date of this Report,
720,000,000 shares of common stock authorized. As of April 14, 2009, we
had 61,173,741 shares of common stock issued and outstanding. As a result,
our Board of Directors has the ability to issue a large number of additional
shares of common stock without shareholder approval, which if issued could cause
substantial dilution to our then shareholders.


11





Our Board of
Directors may designate and authorize issuance of preferred shares which could
have rights, preferences or privileges in priority to our common stock holders,
and which may further dilute common stock holders.  Our Board
of Directors has the authority to issue shares of Preferred Stock and to
determine the price, designation, rights, preferences, privileges, restrictions
and conditions, including voting and dividend rights, of these shares of
Preferred Stock without any further vote or action by the stockholders. The
rights of the holders of Common Stock will be subject to, and may be adversely
affected by, the rights of holders of any Preferred Stock that may be issued in
the future. The issuance of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could make it more difficult for a third party to acquire a majority
of the outstanding voting stock of the Company. At this time, the Company has no
present plans to issue any Preferred Stock.





A
limited public trading market exists for our common stock, which makes it more
difficult for our stockholders to sell their common stock in the public
markets.


Although
our common stock is quoted on the OTCBB under the symbol “AWEC,” there is a
limited public market for our common stock. No assurance can be given that an
active market will develop or that a stockholder will ever be able to liquidate
its shares of common stock without considerable delay, if at all. Many brokerage
firms may not be willing to effect transactions in the securities. Even if a
purchaser finds a broker willing to effect a transaction in these securities,
the combination of brokerage commissions, state transfer taxes, if any, and any
other selling costs may exceed the selling price. Furthermore, our stock price
may be impacted by factors that are unrelated or disproportionate to our
operating performance. These market fluctuations, as well as general economic,
political and market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market price and
liquidity of our common stock.





Our common stock may be subject to
the penny stock rules which may make it more difficult to sell our common
stock .


The
Securities and Exchange Commission has adopted regulations which generally
define a “penny stock” to be any equity security that has a market price, as
defined, less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities may be covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors such as, institutions with assets in excess of $5,000,000
or an individual with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with his or her spouse. For transactions
covered by this rule, the broker-dealers must make a special suitability
determination for the purchase and receive the purchaser’s written agreement of
the transaction prior to the sale. Consequently, the rule may affect the ability
of broker-dealers to sell our securities and also affect the ability of our
stockholders to sell their shares in the secondary market.





ITEM
1B.  UNRESOLVED STAFF COMMENTS





None.





ITEM
2. PROPERTIES




Our
headquarters is located at 123 West 1st Ave.,
Suite 215, Casper, Wyoming.  We lease office space on a month-to-month
basis, for monthly costs of $700.





ITEM
3. LEGAL PROCEEDINGS




None.




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




None.


12


Part
II





ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER


MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES




Market
Information





Our
common stock is traded on the Over the Counter Bulletin Board under the symbol
“AWEC.” Prior to March 6, 2007 there was no established trading market for our
common stock.





The
following is the range of high and low bid prices for our common stock for the
periods indicated. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not represent actual
transactions.





Fiscal
      2008
                
                High
                
                
                LowFirst
      Quarter (January 1-March 31, 2008)
                
                $
                0.80
                
                
                $
                0.32Second
      Quarter (June 30, 2008)
                
                $
                0.76
                
                
                $
                0.45Third
      Quarter (September 30, 2008)
                
                $
                0.70
                
                
                $
                0.04Fourth
      Quarter (December 31, 2008)
                
                $
                0.34
                
                
                $
                0.04





The
closing price for our common stock on December 31, 2008 was $0.06.





Stockholders





As of
February 17, 2009, there were 54,278,002 shares of common stock issued and
outstanding held by 18 stockholders of record (not including street name
holders).





Dividends





We have
not paid dividends to date and do not anticipate paying any dividends in the
foreseeable future. Our Board of Directors intends to follow a policy of
retaining earnings, if any, to finance our growth. The declaration and payment
of dividends in the future will be determined by our Board of Directors in light
of conditions then existing, including our earnings, financial condition,
capital requirements and other factors.





Equity
Compensation Plan Information




The
following table sets forth certain information as of December 31, 2008
regarding our equity compensation plans:





Plan Category
                  
                  Number of Securities to be
                    Issued upon Exercise of
                    Outstanding Options,
                    Warrants and Rights
                    (a)
                  
                  
                  Weighted-average
                    Exercise Price of
                    Outstanding Options,
                    Warrants and Rights
                    (b)
                  
                  
                  Number of Securities
                    Remaining Available for
                    Future Issuance under
                    Equity Compensation Plans
                    (excluding securities
                    reflected in column (a))
                    (c)Equity
      compensation plans approved by security holders (1)
                  
                  
                  750,000
                  
                  
                  $
                  0.38
                  
                  
                  
                  4,650,000Equity
      compensation plans not approved by security holders
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  -Total
                  
                  
                  750,000
                  
                  
                  $
                  0.38
                  
                  
                  
                  4,650,000




(1)
            Includes
      securities to be issued under the Company’s 2008 Equity Incentive
      Plan




13





ITEM
6. SELECTED FINANCIAL DATA





Our
complete financial statements are included following the signature page to this
Form 10-K.





ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN


OF
OPERATIONS





The
following discussion should be read in conjunction with our consolidated
financial statements and notes thereto included elsewhere in this Report.
Forward looking statements are statements not based on historical information
and which relate to future operations, strategies, financial results or other
developments. Forward-looking statements are based upon estimates, forecasts,
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control and many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward-looking statements made by us, or on our behalf. We disclaim any
obligation to update forward-looking statements.




The
discussion and financial statements contained herein are for our fiscal year
ended December 31, 2008 and December 31, 2007. The following discussion
regarding our financial statements should be read in conjunction with our
financial statements included herewith.


We
reported total current assets of $84,557 at December 31, 2008, consisting of
cash of $51,174, receivables of $6,378 and prepaid expenses and deposits of
$27,005.  Total current liabilities reported of $2,352,777 consisted
of $1,021,821 in accounts payable and accrued liabilities, of $377,722 in due to
related parties and of $953,234 in convertible notes and interest on convertible
notes. We had a working capital deficiency of $2,268,220 at December 31,
2008.   We had long term liabilities of $893,127, representing
the long term portion of the convertibles notes, and $32,680 for the asset
retirement obligation.
  Stockholders'
equity decreased from $470,139 at December 31, 2007 to a deficiency position of
$3,025,672 at December 31, 2008. This change is due to a net loss of $5,631,646
in the period, subscriptions received and the issuance of notes convertible into
units of common stock.
  Plan of Operation


Background




We were
incorporated under the laws of the State of Nevada on January 3, 2001 under the
name Henley Ventures Inc. for the purpose of acquiring and developing mineral
properties. We acquired certain rights to mineral claims on the Red Bird,
Pleasant Surprise and Red Bird Protection in British Columbia, Canada. The Red
Bird is a large claim block which covers a number of old gold and copper
showings, which were first discovered in the early part of the last century. In
July 2006, we commenced Phase I of the exploration program to undertake further
geochemical sampling by way of the establishment of a grid to obtain soil and
rock samples for assaying as an initial stage. To date, no minerals have yet
been discovered on the properties and certain of our rights to such mineral
claims expired in September 2007.





In May
2007, we decided to concentrate significant efforts on the exploration,
development and production of oil and gas. To facilitate this shift in business
focus, on June 12, 2007 Henley Ventures, Inc., a Nevada corporation merged with
and into its wholly owned subsidiary, South Sea Energy Corp. resulting in South
Sea Energy, Corp. being the surviving corporation. On June 15, 2007, we signed a
letter of intent with CBM Asia Development Corp., (“CBM”) as amended, to acquire
40% interest in a participation agreement of a coal bed methane project in East
Kalimatan, Indonesia, for $100,000. The letter of intent also provided that our
newly appointed directors and officers receive 26,000,000 shares of our common
stock. The terms of the acquisition were subject to the parties closing the
transaction no later than July 30, 2007. On August 17, 2007, we entered into a
memorandum of understanding for the termination of the negotiations with CBM.
Pursuant to the memorandum of understanding, the 26,000,000 shares issued to our
now former officers and directors were returned to treasury for cancellation and
we relinquished any rights we may have had to the underlying project. At
December 31, 2007, related acquisition costs totaling $209,230 were written
off.


14




On August
24, 2007, we entered into an assignment agreement with Pin Petroleum Partners
Ltd. (“Pin”), whereby Pin agreed to assign its rights and obligation under a
certain letter of intent with Muddy Minerals, LLC (“Muddy”), to a property
referred to as the South Glenrock “C” oil field, located in Converse County,
Wyoming for the aggregate sum of $550,000. Under the terms of the letter of
intent we assumed, we agreed to acquire the oil field, together with a 78% net
royalty interest in the oil field for the aggregate sum of $5,000,000. In
concert with our intention to focus our business endeavors on the U.S. oil and
gas sector, we appointed a new President and director on August 24, 2007, and on
August 28, 2007, we merged with and into our wholly owned subsidiary, Ameriwest
Energy Corp. resulting in Ameriwest Energy Corp. being the surviving
corporation. On May 31, 2008, we entered into an amendment to the agreement with
Muddy whereby we agreed to amend the terms of the letter of intent as follows:
(i) extend the closing date to September 1, 2008; (ii) $1,750,000 that has been
paid to Muddy is non-refundable and deemed earned by Muddy and shall be credited
toward the purchase price at closing; and (iii) in consideration for extending
the closing date, we agreed to pay Muddy two additional payments in the amounts
of $194,575.34 and $105,424.66, respectively. On September 1, 2008, we entered
into an amendment agreement with Muddy whereby we agreed to amend the terms of
the letter of intent as follows: (i) extend the closing date to December 15,
2008; and (ii) in consideration for extending the closing date, we agreed to pay
Muddy the sum of $100,000 including accrued interest on the remaining payments
calculated from June 1, 2008 through December 15, 2008.





On March
19, 2008, we entered into an exclusive option agreement with Hot Springs
Resources, Ltd. to purchase certain assets of Hot Springs including (i) wells,
well bores, leases, contracts, records, books, equipment, buildings, etc., and
(ii) not less than a working interest of 95% at a 79.9% net revenue interest in
certain acreage inside the Burch Ranch Unit, a working interest of 100% at an
82% net revenue interest in leases outside of the Burch Ranch Unit and all of
Hot Springs’ interest in a leasehold attached to or held by unit, other
formations and hydrocarbon substances, for the aggregate purchase price of
$4,280,000 and the issuance of 400,000 shares of our common stock. The option
expired on September 17, 2008. The parties have a verbal agreement to
renegotiate the terms of the option when financing for the project is
available.





On April
15, 2008, we entered into an exclusive option agreement with Alpha Development
Corporation and JK Minerals, Inc. (“Optionors”) to purchase certain assets of
its Cold Creek Unit and adjacent leases including (i) wells, well bores, casing,
leases, contracts, hydrocarbon substances, records, books, documents, licenses,
reports and data, tangible depreciable property and assets such as pumping units
and all equipment used in the production of hydrocarbon substances at Cole
Creek, and (ii) a working interest of about 35% at the net revenue interest that
exists as of April 15, 2008, in all leases and wells in all formations that are
below the base of the Shannon Formation, and the sellers’ working interest in
all depths and formations from the surface to the base of the Shannon Formation
(which was approximately 68% working interest at 77% net revenue interest when
the sellers previously purchased that interest), for the aggregate purchase
price of $10,000,000. On June 25, 2008, we entered into an amendment agreement
with Optionors whereby Optionors agreed to extend the closing of the transaction
to October 30, 2008 provided that we made payments of $200,000 to Optionors no
later than August 18, 2008 and $150,000 no later than September 17, 2008. In the
event we do not exercise the option, such extension payments totaling $350,000
shall be forfeited and retained by Optionors. The option expired on September
17, 2008. The parties have a verbal agreement to renegotiate the terms of the
option when financing for the project is available.





On May 1,
2008, we became the official operator of record for the South Glenrock "C" oil
field and pursuant to an Assignment of Revenues with Muddy, received the right
to all production revenues from the field.




On May
30, 2008 we entered into a Purchase and Sale Agreement with Geochem Exploration,
LLC, a Wyoming limited liability company (“Geochem”) and acquired from Geochem,
100% working interest and 80% net royalty interest in the Skull Valley Prospect
in Tooele County, Utah for the aggregate purchase price of $400,000. We
committed to spud, drill and complete a well on the property no later that March
31, 2009. As of the date of this Report, we have not spudded, drilled and
completed a well and as such are in default of our obligations under the
agreement, which will likely result in a reversion of our interest in the
Prospect back to Geochem.


15





On August
21, 2008, we entered into a Farmout and Area of Mutual Interest (AMI) Agreement
with Tyler Rockies Exploration, Ltd., a Texas limited partnership (“TRE”) where
in consideration for $50,000, we have the right to earn up to a 50% ownership
interest in oil and gas leasehold rights to approximately 2,800 gross acres
within the Geary Prospect lands located in Natrona and Converse counties,
Wyoming. We agreed to commence drilling of a well within the AMI on or before
May 1, 2009. After we have drilled 3 wells to the contract depth of the Dakota
Formation, TRE will assign and convey 50% of its interest in the AMI to us. We
will operate the wells and receive a 75% Net Revenue Interest.





Subsequent
Events





Subsequent
to our fiscal year ended December 31, 2008, on February 25, 2009, we entered
into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation
(“Wold”) where we have the right to earn up to a 100% ownership interest in oil
and gas leasehold rights to approximately 320 net acres within certain land
located in Natrona and Converse counties, Wyoming. We agreed to commence
drilling of a test well within such lands on or before August 1, 2009. After we
have drilled an initial test well to the contract depth of 8,000 feet, Wold will
assign and convey to us, 100% of its interest in the drillsite spacing unit and
participating area, and 65% of its operating rights in the one-half block of the
land where the test well was drilled. We will operate the actual well drilled
and receive a 80% Net Revenue Interest.





Subsequent
to our fiscal year ended December 31, 2008, on March 30, 2009, we entered into
an Agreement to Operate South Glenrock Block “C” And Extension of Purchase
Agreement with Muddy. Under the agreement, both Muddy and we agreed to (i)
extend the closing date to June 1, 2009, (ii) reduce the purchase price to
$4,000,000, (iii) confirm that the amount of $1,750,000 we previously paid
towards the purchase price is non-refundable, (iv) confirm that we shall operate
and manage South Glenrock oilfield until the closing date or upon termination of
the agreement and entitled to all revenue generated from such oilfield, and (v)
assign all our interest in South Glenrock “C” upon termination of the
agreement.




Cash and Cash
Equivalents




As of
December 31, 2008, we had cash of $51,174.  As such, we anticipate
that we will have to raise additional capital through debt or equity financings
to fund our operations and execute our business plan during the next 6 to 12
months.




Critical
Accounting Policies




The
preparation of financial statements in conformity with United States generally
accepted accounting principles requires management of our company to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods.




Our
management routinely makes judgments and estimates about the effects of matters
that are inherently uncertain. As the number of variables and assumptions
affecting the probable future resolution of the uncertainties increase, these
judgments become even more subjective and complex. Our significant accounting
policies are discussed in Note 2 to our audited financial statements for the
fiscal year ended December 31, 2008. We have identified the following accounting
policies, described below, as the most important to an understanding of our
current financial condition and results of operations.




Cash
and cash equivalents




Cash and
cash equivalents are defined as cash on hand, demand deposits and short-term,
highly liquid investments with an original maturity of ninety days or
less.




16




Loss
per share




In
accordance with SFAS No. 128, Earnings Per Share, the basic
loss per common share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding.
Diluted loss per share is computed by dividing net loss by the weighted average
number of shares of common stock, common stock equivalents and potentially
dilutive securities outstanding during each period. Diluted loss per common
share is not presented because it is anti-dilutive. The weighted average number
of shares outstanding during all periods has been retroactively restated to
reflect the following:


i.
              A
      forward stock split of 9 new shares for one old share, effective December
      15, 2006;


ii.
            A
      forward stock split of 3.6 new shares for one old share, effective May 4,
      2007.





Full
Cost Method





Ameriwest
uses the full cost method of accounting for exploration and development
activities as defined by SEC Regulation S-X Rule 4-10. Under this method of
accounting, the costs of unsuccessful, as well as successful, exploration and
development activities are capitalized as property and equipment. This includes
any internal costs that are directly related to exploration and development
activities but does not include any costs related to production, general
corporate overhead or similar activities. Gain or loss on the sale or other
disposition of oil and gas properties is not recognized, unless the gain or loss
would significantly alter the relationship between capitalized costs and proved
reserves of oil and natural gas attributable to a country. The application of
the full cost method of accounting for oil and gas properties generally results
in higher capitalized costs and higher depreciation and amortization rates
compared to the successful efforts method of accounting for oil and gas
properties.





Costs
excluded


Properties
and equipment include costs that are excluded from costs being depreciated or
amortized. Oil and gas costs excluded represent investments in unproved
properties and major development projects in which we own a direct interest.
These unproved property costs include nonproducing leasehold, geological and
geophysical costs associated with leasehold or drilling interests and
exploration drilling costs. Ameriwest excludes these costs on a
country-by-country basis until proved reserves are found or until it is
determined that the costs are impaired. All costs excluded are reviewed at least
quarterly to determine if impairment has occurred.





The
amount of any impairment is transferred to the capitalized costs being amortized
(the depletion, depreciation and amortization) or a charge is made against
earnings for those international operations where a reserve base has not yet
been established. Impairments transferred to the depletion, depreciation and
amortization increase the depletion, depreciation and amortization rate for that
country. For international operations where a reserve base has not yet been
established, an impairment requiring a charge to earnings may be indicated
through evaluation of drilling results, relinquishing drilling rights or other
information.





At
December 31, 2008 and 2007, Ameriwest’s oil and gas interests and deferred
acquisitions costs were located in one geographical segment, being the United
States of America.





Ceiling
test


The full
cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule
4-10. Under full cost accounting rules for each cost center, capitalized costs
of unproved and proved properties, less accumulated amortization and related
deferred income taxes, shall not exceed an amount (the "cost ceiling") equal to
the sum of (a) the present value of future net cash flows from estimated
production of proved oil and gas reserves, based on current economic and
operating condition, discounted at 10 percent, plus (b) the cost of properties
not being amortized, plus (c) the lower of cost or estimated fair value of any
unproved properties included in the costs being amortized, less (d) any income
tax effects related to differences between the book and tax basis of the
properties involved. If capitalized costs exceed this limit, the excess is
charged as an impairment expense. As of December 31, 2008 and 2007, total
capitalized costs were $3,026,925 and $nil respectively, all of which were
subject to the ceiling test for impairment.  At December 31, 2008,
Ameriwest has reviewed these capitalized costs for impairment and determined
that the total costs were subject to impairment.





Amortization


Capitalized
costs within a cost center amortized on the unit-of-production basis using
proved oil and gas reserves include: (i) all capitalized costs, less accumulated
amortization; (ii) the estimated future expenditures (based on current costs) to
be incurred in developing proved reserves; and (iii) estimated dismantlement and
abandonment costs, net of estimated salvage values.  Capitalized costs
subject to amortization do not include the excluded costs as described
above.


17




Impairment
of Long-lived Assets
  In accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-lived Assets, the carrying value of intangible assets
and other long-lived assets are reviewed on a regular basis for the existence of
facts or circumstances that may suggest impairment.  Ameriwest
recognizes impairment when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the asset.  Impairment
losses, if any, are measured as the excess of the carrying amount of the asset
over its estimated fair value.  Oil and gas properties accounted for
using the full cost method of accounting; a method utilized by Ameriwest, is
excluded from this requirement, but will continue to be subject to the ceiling
test limitations.  There were $3,925,066 in impairment losses in 2008
and $nil in 2007.


Income
taxes




The
Company accounts for income taxes under SFAS No. 109, Accounting for Income
Taxes.Under SFAS No.109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between their financial statement carrying amounts and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.




Accounting
for Convertible Instruments




When
Ameriwest issues convertible debt with detachable instruments, it allocates the
proceeds received on a relative fair value basis pursuant to EITF Issue No. 98-5
“Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios “.  Then, it applies the amount
allocated to the convertible instrument, and an effective conversion price is
calculated and used to measure the intrinsic value, if any, of the embedded
conversion option.  The intrinsic value of the embedded conversion option
and the relative fair value of the detachable instruments are recorded as
discounts to the convertible debt and amortized over the term of the
debt.





When
Ameriwest issues convertible debt with non-detachable instruments, the intrinsic
value of the conversion option is computed based on a comparison of the proceeds
of the convertible instrument allocated to the common stock portion of the
conversion option and the fair value at the commitment date of the common stock
to be received by the holder upon conversion pursuant to EITF Issue No. 00-27
Application of Issue No. 98-5 to Certain Convertible Instruments”. The excess of
the fair value of the common stock at the commitment date over proceeds is the
intrinsic value of the embedded conversion option that is recognized by
Ameriwest at the issuance date for the convertible debt.  The intrinsic
value of the embedded conversion option is recorded as a discount to the
convertible debt and amortized over the term of the debt.




Asset
Retirement Obligation




Ameriwest
recognizes asset retirement obligations in accordance with FAS No 143 Accounting for Asset Retirement
Obligation.The fair value of a liability is recorded for an
asset retirement obligation in the year in which it is incurred when a
reasonable estimate of fair value can be made.  The carrying amount of
the related long-lived asset is increased by the same amount as the
liability.  Changes in the liability for an asset retirement
obligation due to the passage of time is measured by applying an interest method
of allocation.  The amount is recognized as an increase in the
liability and an accretion expense in the statement of
operations.  Changes resulting from revisions to the timing or the
amount of the original estimate of undiscounted cash flows are recognized as an
increase or a decrease to the carrying amount of the liability and the related
long-lived asset.




Stock
based compensation




The
Company recognizes stock based compensation expense and other forms of employee
equity compensation in accordance with SFAS No. 123R,Share-Based Payment, as
interpreted by SEC Staff Accounting Bulletin No. 107.


18




Results
of Operations




For
the Fiscal Year Ended December 31, 2008




During
the period ended December 31, 2007, we effected a change in our business focus
to the acquisition, exploration, development and production of oil and gas
assets from the acquisition and development of mineral
properties.   During the fiscal year ended December 31, 2008, we
impaired all of our oil and gas assets due to the uncertainty to complete the
acquisition, and/or to complete the work programs.  Due to these
significant changes, part of our results for the year ended December 31, 2008
and 2007 are likely to be in the future, reported as discontinued operations,
and we believe that a comparison of results of operations for the fiscal years
ended December 31, 2008 and 2007 should not be relied on as an indication of
future performance.




December
      31,2008
                                          
                                          
                                          2007Operator
      fees, Net
                                          
                                          $
                                          28,318
                                          
                                          
                                          $
                                          -ExpensesContribution
      rent
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,650Contribution
      services
                                          
                                          
                                          -
                                          
                                          
                                          
                                          5,534Compensation
                                          
                                          
                                          295,272
                                          
                                          
                                          
                                          49,214Acquisition
      and exploration costs
                                          
                                          
                                          3,925,066
                                          
                                          
                                          
                                          183,230Marketing
      and investor relations
                                          
                                          
                                          249,145
                                          
                                          
                                          
                                          148,276Accretion
      of asset retirement obligation
                                          
                                          
                                          2,684
                                          
                                          
                                          
                                          -Office,
      general and administrative expenses
                                          
                                          
                                          175,566
                                          
                                          
                                          
                                          36,789Professional
      fees
                                          
                                          
                                          319,357
                                          
                                          
                                          
                                          135,890Total
      operating expenses
                                          
                                          
                                          (4,967,090
                                          )
                                          
                                          
                                          (560,583
                                          )Net
      income (loss) from operations
                                          
                                          
                                          (4,938,772
                                          )
                                          
                                          
                                          (560,583
                                          )Interest
      income
                                          
                                          
                                          83
                                          
                                          
                                          
                                          -Interest
      expense
                                          
                                          
                                          (692,957
                                          )
                                          
                                          
                                          (254,768
                                          )Net
      loss for the period
                                          
                                          $
                                          (5,631,646
                                          )
                                          
                                          $
                                          (815,351
                                          )




General
and administrative expenses


During
the fiscal year ended December 31, 2008, we incurred total operating expenses of
$4,967,090, as compared to $560,583 for the year ended December 31, 2007. Aside
from the impairment charges, these expenses were related mainly to executive
compensation and to marketing and investor relations activities. Other expenses
were incurred in relation to activities associated with maintaining a public
listing, such as legal and accounting fees.


Expenses
or other cash flows in this period may not be indicative of future periods as we
are in the early development stage.


19





Acquisition
costs


In April
2008, we entered into an option agreement with Alpha Development Corporation and
JK Minerals, Inc. to purchase certain assets of Alpha.  In September
2008, we wrote off $ $870,846 in acquisition costs related to this
agreement.
  In June
2007, we entered into a letter of intent to participate in the development and
exploration of a coal bed methane project in East Kalimatan, Indonesia. In
August 2007, we opted to not complete this acquisition, and accordingly, at
December 31, 2007, we wrote off the related acquisition costs totaling
$183,230.
  In August
21, 2008, we entered into a farmout and area of mutual interest agreement with
Tyler Rockies Exploration, Ltd. (“Tyler”) where in consideration for $50,000, we
have the right to earn up to a 50% ownership interest in oil and gas leasehold
rights to approximately 2,800 gross acres within the Geary Prospect lands
located in Natrona and Converse counties, Wyoming.   Under the
terms of the agreement, we agreed to commence drilling of a well on or before
May 1, 2009.  Upon drilling 3 wells to the contract depth of the
Dakota Formation, Tyler will assign and convey 50% of its interest to
Ameriwest.
 
 As at
December 31, 2008, $50,000 has been paid to Tyler pursuant to the farmout
agreement.  However, the  farmout agreements expired on May
1, 2008 and August 1, 2008, respectively. Accordingly, at December 31, 2008, the
Geary prospect was fully impaired.
 
 In May
2008, we entered into a Purchase and Sale Agreement with Geochem Exploration,
LLC, and acquired an undivided working interest and an eighty percent (80%) net
royalty interest in and to the Skull Valley Prospect in Tooele County, Utah, in
consideration for an aggregate sum of $400,000.  We have
fully impaired the value of our interest in the prospect due to our inability to
accurately value such interest in accordance with Guide 2 of the Securities
Act.
 
 In August 2007,we
entered into a letter of intent, as amended, with Pin Petroleum Partners Ltd.
and Muddy Minerals, LLC, to acquire a 99.5% working interest together with a 78%
net royalty interest in the property referred to as the South Glenrock “C” Oil
Field, located in Converse County, Wyoming, for the aggregate sum of
$5,000,000.  Effective May 1, 2008, Muddy assigned its revenues from
production to Ameriwest.
 
 Pursuant
to the agreement, partial payments are to be credited against the purchase price
made by us, giving us the exclusive option to purchase the
property.   The current option period will expire on June 1,
2009. We have
fully impaired the value of our interest in the oil field due to our inability
to accurately value such interest in accordance with Guide 2 of the Securities
Act.




Period
from inception, January 3, 2001 to December 31, 2008
 
 We have
incurred losses in each period since inception and have an accumulated deficit
of $6,606,098 at December 31, 2008. We expect to continue to incur losses as a
result of expenditures for general and administrative
activities.




Liquidity
and Capital Resources


As of
December 31, 2008, we had cash of $51,174, and working capital deficiency of
$2,268,220.  During the period ended December 31, 2008, we funded our
operations from limited revenues and the proceeds of private sales of equity and
convertible notes. We will need to complete further financings to provide
sufficient working capital to fund our operations for at least the next 12
months. Changes in our operating plans, increased expenses, additional
acquisitions, or other events, may cause us to seek additional equity or debt
financing in the future. Given the current economic downturn, tight credit
markets and significant drop in crude oil prices, our ability to raise
additional capital or on terms favorable to us, may be significantly
hampered.  If we are unable to raise the necessary capital to fund our
current operations or raise such capital on terms favorable to us, it may have a
significant adverse effect on our financial condition and business
objectives.
  For the
period ended December 31, 2008, we had $603,276 used in cash flows provided by
operating activities. Net cash from operating activities reflected $16,650 in
prepaid expenses and deposits, $6,378 in receivable and an increase in accounts
payable and due to related parties of $472,500.  Investment activities
used $1,923,295 in cash during the period.


For the
period ended December 31, 2008, we had $603,276 used in cash flows provided by
operating activities. Net cash from operating activities reflected $16,650 in
prepaid expenses and deposits, $6,378 in receivable and an increase in accounts
payable and due to related parties of $472.500.  Investment activities
used $1,23,295 in cash during the period.




We raised
$2,280,000 during the fiscal year ended December 31, 2008 from the proceeds of
convertible notes, $380,000 from the issuance of common stock, and used $82,500
for deferred financing costs.




Our
current cash requirements are significant due to contemplated acquisition and
planned exploration and development projects. Accordingly, we expect to continue
to use cash to fund operations for at least the remaining of our fiscal year
ended December 31, 2009, as we look to expand our asset base and fund
exploration of our properties.




Recent
Financings


Convertible
notes – short term
 On June
6, 2007, we received convertible loan proceeds of $66,946. The amount is
unsecured and is due on demand. The principal amount bears interest at 10% per
annum calculated annually. Arrears in payment of the principal or interest will
bear interest at 30% per annum, calculated annually. At any time that the
principal and interest shall remain outstanding, the lender has the right to
convert such principal and interest to our shares at a rate of $0.60 per unit,
each unit consisting of one share of common stock and one purchase warrant. Each
warrant may be exercised at $0.60 for the first year and at $0.90 for the second
year. At December 31, 2008, we accrued $10,528 in interest in relation to the
note.


20
 
 On June
13, 2007, we received convertible loan proceeds of $150,000. The amount is
unsecured and is due on demand. The principal amount bears interest at 10% per
annum calculated annually. Arrears in payment of the principal or interest will
bear interest at 30% per annum, calculated annually. At any time that the
principal and interest shall remain outstanding, the lender has the right to
convert such principal and interest to our shares at a rate of $0.60 per unit,
each unit consisting of one share of common stock and one purchase warrant. Each
warrant may be exercised at $0.60 for the first year and at $0.90 for the second
year. At December 31, 2008, we accrued $23,301 in interest in relation to the
note.
 
 On July
3, 2007, we received loan proceeds of $100,000. The amount is unsecured and is
due on demand. The principal amount bears interest at 10% per annum calculated
annually. Arrears in payment of the principal or interest will bear interest at
30% per annum, calculated annually. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to our shares at a rate of $0.60 per unit, each unit consisting of one
share of common stock and one purchase warrant. Each warrant may be exercised at
$0.60 for the first year and at $0.90 for the second year. An amount of $68,489
was recorded on July 3, 2007 in additional paid-in capital, representing the
relative fair value of the beneficial conversion feature in connection with the
$100,000 note. At December 31, 2007, this beneficial conversion was fully
amortized to interest expense.  At December 31, 2008, we accrued
$14,986 in interest in relation to the note.
  On August
16, 2007, we received loan proceeds of $30,000. The amount is unsecured and is
due on demand. The principal amount bears interest at 10% per annum calculated
annually. Arrears in payment of the principal or interest will bear interest at
30% per annum, calculated annually. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to shares of the Company at a rate of $0.60 per unit, each unit
consisting of one share of common stock and one purchase warrant. The warrants
are exercisable at $0.60 for the first year and at $0.90 for the second year. An
amount of $20,804 was recorded on August 16, 2007 in additional paid-in capital,
representing the fair value of the beneficial conversion feature in connection
with the $30,000 note. At December 31, 2007, this beneficial conversion was
fully amortized to interest expense. At December 31, 2008, we accrued $4,134 in
interest in relation to the note.
 
 On
November 6, 2007, we received loan proceeds of $50,000. The amount is unsecured
and is due on demand. The principal amount bears interest at 10% per annum
calculated annually. Arrears in payment of the principal or interest will bear
interest at 30% per annum, calculated annually. At any time that the principal
and interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of the Company at a rate of $0.60 per unit,
each unit consisting of one share of common stock and one purchase warrant. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year. An amount of $35,113 was recorded on November 6, 2007 in additional
paid-in capital, representing the fair value of the beneficial conversion
feature in connection with the $50,000 note. At December 31, 2007, this
beneficial conversion was fully amortized to interest expense. At December 31,
2008, we accrued $5,767 in interest in relation to the note.
 
 On
November 20, 2007, we received loan proceeds of $50,000. The amount is unsecured
and is due on demand. The principal amount bears interest at 10% per annum
calculated annually. Arrears in payment of the principal or interest will bear
interest at 30% per annum, calculated annually. At any time that the principal
and interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of the Company at a rate of $0.60 per unit,
each unit consisting of one share of common stock and one purchase warrant. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year. An amount of $34,952 was recorded on November 20, 2007 in additional
paid-in capital, representing the fair value of the beneficial conversion
feature in connection with the $50,000 note. At December 31, 2007, this
beneficial conversion was fully amortized to interest expense.. At December 31,
2008, we accrued $5,575 in interest in relation to the note.
 
 On
November 26, 2007, we received loan proceeds of $10,000. The amount is unsecured
and is due on demand. The principal amount bears interest at 10% per annum
calculated annually. Arrears in payment of the principal or interest will bear
interest at 30% per annum, calculated annually. At any time that the principal
and interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of the Company at a rate of $0.60 per unit,
each unit consisting of one share of common stock and one purchase warrant. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year. An amount of $6,882 was recorded on November 26, 2007 in additional
paid-in capital, representing the fair value of the beneficial conversion
feature in connection with the $10,000 note. At December 31, 2007, this
beneficial conversion was fully amortized to interest expense..  . At
December 31, 2008, we accrued $1,098 in interest in relation to the
note.
 
 On
October 2, 2007, we received loan proceeds of $500,000. The amount is unsecured
and is due in two years. The principal amount bears interest at 6% per annum
calculated and payable annually. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to shares of the Company at a rate of $0.60 per share. The Company also
issued a warrant to purchase 833,333 shares of our common stock in connection
with this note, expiring on October 2, 2009. The warrants are exercisable at
$0.60 for the first year and at $0.90 for the second year. At December 31, 2008,
we accrued $37,479 in interest in relation to the note. The convertible note is
presented net of a discount of $188,098 at December 31, 2008, representing the
unamortized relative fair value of the detachable warrants issued in connection
with the note. This discount is being amortized to interest expense over two
years.


21





Convertible
notes – long term


On March
3, 2008, we received loan proceeds of $50,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 83,333 shares of our common stock in connection with this
note, expiring on March 3, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,490 in interest in relation to the note. The convertible note is presented
net of a discount of $26,515 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years


On March
3, 2008, we received loan proceeds of $50,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 83,333 shares of our common stock in connection with this
note, expiring on March 3, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,490 in interest in relation to the note. The convertible note is presented
net of a discount of $26,515 at December 31, 2008, 2008, representing the
unamortized relative fair value of the detachable warrants issued in connection
with the note. This discount is being amortized to interest expense over two
years




On March
10, 2008, we received loan proceeds of $150,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 250,000 shares of our common stock in connection with this
note, expiring on March 10, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$7,299 in interest in relation to the note. The convertible note is presented
net of a discount of $92,756 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On March
17, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on March 17, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$4,751 in interest in relation to the note. The convertible note is presented
net of a discount of $48,246 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.


22


On March
25, 2008, we received loan proceeds of $250,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 416,667 shares of our common stock in connection with this
note, expiring on March 25, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$11,548 in interest in relation to the note. The convertible note is presented
net of a discount of $127,006 at December 31, 2008, 2008, representing the
unamortized relative fair value of the detachable warrants issued in connection
with the note. This discount is being amortized to interest expense over two
years.





On April
15, 2008, we received loan proceeds of $300,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 500,000 shares of our common stock in connection with this
note, expiring on April 15, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, 2008, we
accrued $12,822 in interest in relation to the note. The convertible note is
presented net of a discount of $194,189 at December 31, 2008, 2008, representing
the unamortized relative fair value of the detachable warrants issued in
connection with the note. This discount is being amortized to interest expense
over two years.





On May
12, 2008, we received loan proceeds of $300,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 500,000 shares of our common stock in connection with this
note, expiring on May 12, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$11,490 in interest in relation to the note. The convertible note is presented
net of a discount of $169,343 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On May
15, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on May 15, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$3,781 in interest in relation to the note. The convertible note is presented
net of a discount of $58,669 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On June
2, 2008, we received loan proceeds of $400,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 666,667 shares of our common stock in connection with this
note, expiring on June 2, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$13,940 in interest in relation to the note. The convertible note is presented
net of a discount of $299,967 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.




On July
16, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on July 16, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,762 in interest in relation to the note. The convertible note is presented
net of a discount of $66,228 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.


23


On July
25, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on July 25, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,614 in interest in relation to the note. The convertible note is presented
net of a discount of $55,282 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On August
12, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on August 12, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,318 in interest in relation to the note. The convertible note is presented
net of a discount of $59,094 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On August
13, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on August 13, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,301 in interest in relation to the note. The convertible note is presented
net of a discount of $59,086 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On August
18, 2008, we received loan proceeds of $100,000. The amount is unsecured and is
due in two years. The principal amount bears interest at 6% per annum calculated
and payable annually. At any time that the principal and interest shall remain
outstanding, the lender has the right to convert such principal and interest to
shares of the Company at a rate of $0.60 per share. The Company also issued a
warrant to purchase 166,667 shares of our common stock in connection with this
note, expiring on August 18, 2010. The warrants are exercisable at $0.60 for the
first year and at $0.90 for the second year. At December 31, 2008, we accrued
$2,219 in interest in relation to the note. The convertible note is presented
net of a discount of $49,658 at December 31, 2008, representing the unamortized
relative fair value of the detachable warrants issued in connection with the
note. This discount is being amortized to interest expense over two
years.





On
October 16, 2008, we received loan proceeds of $60,000. The amount is unsecured
and is due in two years. The principal amount bears interest at 6% per annum
calculated and payable annually. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to shares of the Company at a rate of $0.60 per share. The Company also
issued a warrant to purchase 100,000 shares of our common stock in connection
with this note, expiring on October 16, 2010. The warrants are exercisable at
$0.60 for the first year and at $0.90 for the second year. At December 31, 2008,
we accrued $750 in interest in relation to the note. The convertible note is
presented net of a discount of $22,586 at December 31, 2008, representing the
unamortized relative fair value of the detachable warrants issued in connection
with the note. This discount is being amortized to interest expense over two
years.


24


On
November 10, 2008, we received loan proceeds of $50,000. The amount is unsecured
and is due in two years. The principal amount bears interest at 6% per annum
calculated and payable annually. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to shares of the Company at a rate of $0.15 per share. The Company also
issued a warrant to purchase 333,333 shares of our common stock in connection
with this note, expiring on November 10, 2010. The warrants are exercisable at
$0.30 for the first year and at $0.45 for the second year. At December 31, 2008,
we accrued $419 in interest in relation to the note. The convertible note is
presented net of a discount of $48,840 at December 31, 2008, representing the
unamortized relative fair value of the detachable warrants issued in connection
with the note. This discount is being amortized to interest expense over two
years.





On
December 27, 2008, we received loan proceeds of $20,000. The amount is unsecured
and is due in two years. The principal amount bears interest at 6% per annum
calculated and payable annually. At any time that the principal and interest
shall remain outstanding, the lender has the right to convert such principal and
interest to shares of the Company at a rate of $0.10 per share. The Company also
issued a warrant to purchase 200,000 shares of our common stock in connection
with this note, expiring on December 27, 2010. The warrants are exercisable at
$0.30 for the first year and at $0.45 for the second year. At December 31, 2008,
we accrued $13 in interest in relation to the note. The convertible note is
presented net of a discount of $9,409 at December 31, 2008, representing the
unamortized relative fair value of the detachable warrants issued in connection
with the note. This discount is being amortized to interest expense over two
years.





Issuance
of common stock





On June
6, 2007, we issued 5,548,000 common shares at $0.01 per share for net proceeds
of $55,480.





On June
15, 2006, we issued 26,000,000 to our officers and directors pursuant to the
letter of intent with CBM. On August 17, 2007, upon the termination of the
letter of intent with CBM, the shares were returned to treasury for
cancellation.





On
October 7, 2007, we issued 1,083,334 units at a price of $0.60 per unit, for net
proceeds of $650,000. Each unit consisting of one share of common stock and one
share purchase warrant, each warrant exercisable at $0.60 for the first year and
at $0.90 for the second year. We incurred share issue costs of $32,500
associated with this private financing.




On March
19, 2008, we issued and sold 666,668 units of our securities at a price of $0.60
per unit, for net proceeds of $400,000. Each unit consist of one share of our
common stock and one share purchase warrant, each warrant is exercisable at
$0.60 for the first year and at $0.90 for the second year.




Off-Balance
Sheet Arrangements




We do not
have any off-balance sheet arrangements, as defined in Item 303(a)(4) of
Regulation S-K.




Capital
Expenditures





On May
30, 2008 we acquired from Geochem, 100% working interest and 80% net royalty
interest in the Skull Valley Prospect in Tooele County, Utah for the aggregate
purchase price of $400,000. Additionally, we had acquisition costs which have
been deferred pending closing on property acquisitions totaling
$110.





The
following table outlines payments due under our significant contractual
obligations over the periods shown, exclusive of interest:





Payments Due by PeriodContract
      Obligations
                    At
      December 31, 2008
                  
                  Total
                  
                  
                  Less than
                    1 Year
                  
                  
                  1-3 years
                  
                  
                  3-5 years
                  
                  
                  More than
                    5 yearsTotal
      Debt
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0





The above
table outlines our obligations as of December 31, 2008 and does not reflect any
changes in our obligations that have occurred after that date.


25


ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK


Not
applicable.





ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





Our
financial statements are included following the signature page to this Form
10-K.





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





None.





ITEM
9(T)A. CONTROLS AND PROCEDURES


We
carried out an evaluation, under the supervision and with the participation of
our management, including our Principal Executive Officer along with our
Principal Financial Officer, of the effectiveness of the design of the our
disclosure controls and procedures (as defined by Exchange Act
Rule 13a-15(e) and 15a-15(e)) as of the end of our fiscal year pursuant to
Exchange Act Rule 13a-15. Based upon that evaluation, our Principal
Executive Officer along with our Principal Financial Officer concluded that our
disclosure controls and procedures are not effective in ensuring that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission’s rules and
forms. This conclusion is based on findings that constituted material
weaknesses. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the Company’s interim
financial statements will not be prevented or detected on a timely
basis.





Management’s Report on Internal
Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting based on criteria established in the
framework in Internal Control
– Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, our
management concluded that our internal control over financial reporting was not
effective as of December 31, 2008.





In
performing this assessment, our management identified the following material
weaknesses: absence of adequate segregation of duties relating to oversight and
management of our systems. In light of the conclusion that our internal control
over financial reporting was not effective, our management designed a plan in
the fiscal year ended December 31, 2007, intended to remediate such
ineffectiveness and to strengthen our internal controls over financial
reporting. Our management has implemented portions of, and is in the process of
implementing the remainder of this plan through the implementation of certain
remedial measures, which include:





1.
            Improving the control and
      oversight of the duties relating to the systems we use in the evaluation
      and processing of certain accounts and areas and in the posting and
      recording of journal entries into certain accounts (in which material
      weaknesses have been identified). We began some of these improvements in
      November 2007 and will continue to identify and make necessary
      improvements for the foreseeable
future.





2.
            The segregation of duties
      relating to the processing of accounts and the recording of journal
      entries into certain accounts. We completed material improvements in
      February 2008, specifically segregating daily accounting and
      administrative duties to more effectively process, record, summarize and
      report information required to be disclosed in our periodic
      reports.


3.
            Retaining the services of an
      experienced chief financial officer to enhance our financial reporting
      capabilities. We retained an experienced chief financial officer in June
      2008.





4.
            Establishing an audit committee
      comprised of independent directors. We estimate establishing such a
      committee in the second quarter of fiscal year 2009 after we reach a
      firmer financial position and complete certain key
      acquisitions.





While our
management continues to evaluate the on-going costs of these remediation
efforts, we estimate the costs of further improvements may be in excess of
$300,000 per year. We believe that our improvements to date have cost
approximately $100,000.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Our management’s report was not subject to attestation by
our registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit us to provide only our
management’s report in this annual report.





Changes
in Internal Control over Financial Reporting





No
additional material remedial measures were taken during the quarter ended
December 31, 2008. We have had very limited operations and there were no changes
in our internal controls over financial reporting that occurred during the three
months ended December 31, 2008 that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting. We
believe that a control system, no matter how well designed and operated, cannot
provide absolute assurance that the objectives of the control system are met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within any company have been
detected.





ITEM
9B. OTHER INFORMATION





Sale of
Securities





On
November 10, 2008, we issued a convertible note to a foreign accredited
investor for proceeds of $50,000.  The amount is unsecured and is due
in two years.  The principal amount bears interest at 6% per annum
calculated and payable annually.   At any time that the principal
and interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of our common stock at a rate of $0.15 per
share.  We also issued a warrant to purchase 333,333 shares of our
common stock in connection with this note, expiring on November 10,
2010.  The warrants are exercisable at $0.30 for the first year and at
$0.45 for the second year.    We offered and sold the
convertible note in reliance on Section 506 of Regulation D and/or Regulation S
of the Securities Act, and comparable exemptions for sales to “accredited”
investors under state securities laws.





On
December 27, 2008, we issued a convertible note to a foreign accredited
investor for proceeds of $20,000.  The amount is unsecured and is due
in two years.  The principal amount bears interest at 6% per annum
calculated and payable annually.   At any time that the principal
and interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of our common stock at a rate of $0.10 per
share.  We also issued a warrant to purchase 200,000 shares of our
common stock in connection with this note, expiring on December 27,
2010.  The warrants are exercisable at $0.30 for the first year and at
$0.45 for the second year.    We offered and sold the
convertible note in reliance on Section 506 of Regulation D and/or Regulation S
of the Securities Act, and comparable exemptions for sales to “accredited”
investors under state securities laws.


27


Commercial
Agreements





Subsequent
to our fiscal year ended December 31, 2008, on February 17, 2009, we entered
into an amendment to that certain Assignment of Revenues with Muddy Mineral
Exploration, LLC dated May 1, 2008 whereby such assignment would automatically
terminate if we apply for the appointment of a receiver, trustee, liquidator or
custodian, make a general assignment for the benefit of our creditors, dissolve
or liquidate, or commence a voluntary liquidation, reorganization, bankruptcy or
insolvency proceeding.





Subsequent
to our fiscal year ended December 31, 2008, on February 25, 2009, we entered
into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation
(“Wold”) where we have the right to earn up to a 100% ownership interest in oil
and gas leasehold rights to approximately 320 net acres within certain land
located in Natrona and Converse counties, Wyoming. We agreed to commence
drilling of a test well within such lands on or before August 1, 2009. After we
have drilled an initial test well to the contract depth of 8,000 feet, Wold will
assign and convey to us, 100% of its interest in the drillsite spacing unit and
participating area, and 65% of its operating rights in the one-half block of the
land where the well was drilled.  We have the right, not the
obligation, to drill an actual well within 6 months after the initial test well
is drilled. We will operate the well and receive a 80% Net Revenue Interest. The
Agreement will continue in effect so long as we have the right to earn the
ownership interest in oil and gas leasehold rights.


28


PART
III




ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE




Directors
and Executive Officers





The
following table sets forth the names and ages of our current directors and
executive officers, the principal offices and positions held by each
person:





Person
              
              Age
              
              PositionWalter
      Merschat
              
              63
              
              Chairman
      of the Board; President, Secretary and former Chief Financial
      OfficerJoseph
      McQuade
              
              57
              
              Chief
      Financial OfficerChris
      D. Wright
              
              51
              
              DirectorJon
      Clement Nicolaysen
              
              62
              
              Director




Walter
Merschat




Mr.
Merschat was appointed as our President, Secretary and Chief Financial Officer
effective January 29, 2008.  Prior to joining us, Mr. Merschat is the
founder and has served as the President of Scientific Geochemical Services and
Merschat Minerals, LLC since 1987. He gained his geochemical experience while
employed by Gulf Research and Development Company (Gulf Oil Co.) with over a
decade of management, execution and interpretation of geochemical programs in
the Rocky Mountain West. Mr. Merschat has conducted numerous geochemical surveys
for major and independent oil and gas companies on a worldwide basis. Mr.
Merschat received his Masters of Science in Geology from Ohio University in 1971
and his Bachelor of Science in Geology from Ohio University in
1967.




Joseph
McQuade




Mr.
McQuade was appointed as our Chief Financial Officer effective June 5, 2008.
Prior to joining us, Mr. McQuade has participated in the oil and gas industry in
various finance, accounting and managerial roles for over 35 years. From 1981
through 1998, he served as Vice President of Finance, President or Chairman of
the Board of Hawk Industries, Inc., a public oil and gas exploration company
with properties in Wyoming, Utah, Colorado, Montana, New Mexico and Oklahoma.
From 1998 to 2002, Mr. McQuade served as President and CEO of Allagesh Oil
Company, a group of oil and gas royalty partnerships. Most recently from 2003 to
the 2007, he served as Chief Financial Officer of Woodworker’s Supply, Inc. Mr.
McQuade holds a Bachelor of Science degree from Brigham Young University and a
Masters in Business Administration from the University of Wyoming. Additionally,
he is a member of the American Institute of Certified Public Accountants and
Wyoming Society of Certified Public Accountants.




Chris D.
Wright




Mr.
Wright was appointed to our Board on August 24, 2007.  He also served
as our President from August 24, 2007 to December 7, 2007.  Mr. Wright
has over 20 years of experience in finance and administrative management in both
private and public companies. In 1995, he founded Velvet Exploration Ltd., an
oil and gas company based in Calgary, Alberta, Canada, which later traded on the
Toronto Stock Exchange. Mr. Wright served as the chairman of Velvet Exploration
until it was sold to El Paso Corporation in June 2001 for Cdn. $432 million.
Since 1997, Mr. Wright has been the president and CEO of First Merit Group Ltd.,
a private venture capital and investment firm based in Vancouver, British
Columbia, Canada. Mr. Wright received a law degree from the University of
Victoria in 1986 and a bachelor's degree from the University of Alberta in
1981.


29


Jon
Clement Nicolaysen





Mr. Nicolaysen was appointed to our
Board on February 6, 2008. He has more than 40 years of experience
in business, mineral development and agriculture. He has served as president of
JK Minerals Inc., a private oil company for 19 years. Under his leadership, JK
Minerals consolidated ownership and increased production in the historic Cole
Creek Oil field northeast of Casper, Wyoming. In 2001, he became the unit
operator of the Cole Creek Oil field. He also is a founding member of Wyoming
Mineral Exploration, LLC, and Muddy Mineral Exploration, LLC, and used his
expertise in land title and acquisition to consolidate other productive fields
in the Powder River Basin of Wyoming. Two of these are the South Glenrock Block
“C” unit and the Big Muddy Oil field. Mr. Nicolaysen received his Masters of
Science in Business Administration from the University of Wyoming in 1970,
Bachelor of Science in Business Administration from Colorado College in 1968,
and was an inaugural member of the Wyoming Agriculture Leadership Program, a
W.K. Kellogg Foundation-sponsored fellowship from 1984 to
1986.





Audit
Committee Financial Expert





Our  Board
of Directors  has not  established  a
separate  audit committee within the meaning of
Section  3(a)(58)(A) of the Securities  Exchange Act of
1934,  as
amended  (the  "Exchange  Act").  Instead,
the entire Board of Directors acts as the audit committee within the meaning of
Section 3(a)(58)(B) of the  Exchange  Act.
In  addition,  Chris D. Wright
currently  meets  the  definition  of an
"audit  committee  financial expert"  within the
meaning of Item 407(d)(5) of Regulation SK. Mr. Wright and Mr. Nicolaysen are
independent directors.  We are seeking further candidates for outside
directors to serve on a separate audit committee when we establish one. Due to
our small size and limited operations and resources, it has been difficult to
recruit outside directors.





Compliance
with Section 16(a) of the Securities Exchange Act of 1934





Except as
previously disclosed on our annual report for the year ended December 31, 2007,
and based solely upon a review of Forms 3, 4 and 5 delivered to us as filed with
the Securities Exchange Commission, our executive officers and directors, and
persons who own more than 10% of our Common Stock timely filed all required
reports pursuant to Section 16(a) of the Securities Exchange Act.





Code
of Ethics





We have
adopted a Code of Ethics applicable to all employees including our principal
executive officer and principal financial officer. A copy of the Code of Ethics
is attached to this Report.





ITEM
11. EXECUTIVE COMPENSATION




Summary
Compensation





The
summary compensation table below shows certain compensation information for
services rendered in all capacities to us by our principal executive officer and
by each other executive officer whose total annual salary and bonus exceeded
$100,000 during the fiscal periods ended December 31, 2008 and December 31,
2007. Other than as set forth below, no executive officer’s total annual
compensation exceeded $100,000 during our last fiscal period.


30


Summary
Compensation Table





Non-
                                          Equity
                                        
                                        
                                        Non-
                                          qualifiedIncentive
                                        
                                        
                                        Deferred
                                        
                                        
                                        AllStock
                                        
                                        
                                        Option
                                        
                                        
                                        Plan
                                        
                                        
                                        Compensation
                                        
                                        
                                        OtherSalary
                                        
                                        
                                        Bonus
                                        
                                        
                                        Awards
                                        
                                        
                                        Awards
                                        
                                        
                                        Compensation
                                        
                                        
                                        Earnings
                                        
                                        
                                        Compensation
                                        
                                        
                                        TotalName
      and
                                        
                                        Year
                                        
                                        ($)
                                        
                                        
                                        ($)
                                        
                                        
                                        ($)
                                        
                                        
                                        ($)
                                        
                                        
                                        ($)
                                        
                                        
                                        ($)
                                        
                                        
                                        ($)
                                        
                                        
                                        ($)Principal
      Position (a)
                                        
                                        (b)
                                        
                                        (c)
                                        
                                        
                                        (d)
                                        
                                        
                                        (e)(2)
                                        
                                        
                                        (f)
                                        
                                        
                                        (g)
                                        
                                        
                                        (h)
                                        
                                        
                                        (i)
                                        
                                        
                                        (j)Walter
      Merschat,
                                        
                                        2008
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        77,500
                                        
                                        
                                        $
                                        77,500President,
      Chairman of the Board, and Former Chief Financial Officer
    (1)Joseph
      J. McQuade,
                                        
                                        2008
                                        
                                        $
                                        50,625
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        192,252
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        242,877Chief
      Financial Officer (2)Gregory
      Leigh Lyons,
                                        
                                        2008
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        7,500
                                        
                                        
                                        $
                                        2,500Former
      President, Chief Financial Officer and Director(3)
                                        
                                        2007
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        2,500
                                        
                                        
                                        $
                                        2,500Chris
      D. Wright,
                                        
                                        2007
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        15,000
                                        
                                        
                                        $
                                        15,000Director
      and Former President(4)Dennis
      Mee,
                                          Former
      Chief Financial Officer and Director(5)
                                        
                                        2007
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        29,680
                                        
                                        
                                        $
                                        29,680Alan
      Charuk,
                                          Former
      President and Chairman of the Board(6)
                                        
                                        2007
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-Sam
      Hirji,
                                          Former
      President and Director (7)
                                        
                                        2007
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-Herbert
      Moeller,
                                          Former
      Chief Financial Officer, Secretary, Treasurer and Director
    (8)
                                        
                                        2007
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-
                                        
                                        
                                        $
                                        -0-





(1)
            Merschat
      resigned as our Chief Financial Officer on [June 5,
  2008].


(2)
            Mr.
      McQuade became our Chief Financial Officer on June 5,
  2008.


(3)
            Mr.
      Lyons resigned as our President, Secretary and Treasurer on January 29,
      2008 and from our Board on February 6,
2008.


(4)
            Mr.
      Wright resigned as our President on December 7,
  2007.


31




(5)
            Mr.
      Mee resigned as our President on August 23, 2007 and as our Chief
      Financial Officer, Secretary, Treasurer and Director on December 27,
      2007.


(6)
            Mr.
      Charuk resigned as our President and Director on August 17,
      2007.


(7)
            Mr.
      Hirji resigned as our President, Chief Executive Officer and Director on
      June 15, 2007.


(8)
            Mr.
      Moeller resigned as our Chief Financial Officer, Secretary, Treasurer and
      Director on May 28, 2007.





We
entered into an employment agreement with Joseph J. McQuade on June 5, 2008 for
his employment as our Chief Financial Officer. Pursuant to the terms of the
employment agreement, Mr. McQuade shall receive a base salary of $7,500 per
month, subject to applicable tax withholdings. After the approval of the 2008
Equity Incentive Plan and subject to Board approval, Mr. McQuade is also to
receive a stock option for 500,000 shares of the our common stock, subject to a
three-year vesting period. In the event that Mr. McQuade’s employment is
terminated without cause, Mr. McQuade shall be eligible to receive a termination
payment equal to two (2) months’ base salary.





Pursuant
to a management services agreement, we incurred $2,500 in fees to Mr. Lyons for
the fiscal year ended December 31, 2007.   The consulting
agreement was terminated in January 2008.





Pursuant
to a management services agreement, we incurred $15,000 in fees to Mr. Wright
for the fiscal year ended December 31, 2007.   The consulting
agreement was terminated in November 2007.





Pursuant
to a management services agreement, we incurred $29,680 in fees to Mr. Mee for
the fiscal year ended December 31, 2007.   The consulting
agreement was terminated in December 2007.





Mr.
Charuk was issued 20,000,000 shares of our common stock in consideration for his
appointment as President and Director, and in accordance with the letter of
intent with CBM dated June 15, 2007.  Mr. Charuk is a principal
shareholder and officer of CBM.  Upon termination of the letter of
intent on August 17, 2007, Mr. Charuk returned to us all of the shares
previously issued to him.





There was
no compensation paid to Mr. Hirji and Mr. Moeller.





Outstanding Equity Awards at Fiscal
Year-End




The
following table provides information about outstanding option and stock awards
held by the named executive officers as of December 31, 2008. The related
compensation cost of awards granted in fiscal 2008 are also disclosed in the
Summary Compensation Table.


32


OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END





OPTION AWARDS
                        
                        
                        STOCK AWARDSName
                          (a)
                        
                        Number of
                          Securities
                          Underlying
                          Unexercised
                          Options
                          (#)
                          Exercisable
                          (b)
                        
                        
                        Number of
                          Securities
                          Underlying
                          Unexercised
                          Options
                          (#)
                          Unexercisable
                          (c)
                        
                        
                        Equity
                          Incentive
                          Plan
                          Awards:
                          Number of
                          Securities
                          Underlying
                          Unexercised
                          Unearned
                          Options
                          (#)
                          (d)
                        
                        
                        Option
                          Exercise
                          Price
                          ($)
                          (e)
                        
                        
                        Option
                          Expiration
                          Date
                          (f)
                        
                        
                        Number
                          of
                          Shares
                          or Units
                          of Stock
                          That
                          Have
                          Not
                          Vested
                          (#)
                          (g)
                        
                        
                        Market
                          Value
                          of
                          Shares
                          or
                          Units
                          of
                          Stock
                          That
                          Have
                          Not
                          Vested
                          ($)
                          (h)
                        
                        
                        Equity
                          Incentive
                          Plan
                          Awards:
                          Number
                          of
                          Unearned
                          Shares,
                          Units or
                          Other
                          Rights
                          That
                          Have Not
                          Vested
                          (#)
                          (i)
                        
                        
                        Equity
                          Incentive
                          Plan
                          Awards:
                          Market or
                          Payout
                          Value of
                          Unearned
                          Shares,
                          Units or
                          Other
                          Rights
                          That
                          Have Not
                          Vested
                          (#)
                          (j)WalterMerschat
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Joseph
      J. McQuade
                        
                        
                        166,667
                        
                        
                        
                        -
                        
                        
                        
                        333,333
                        
                        
                        
                        0.38
                        
                        
                        9/24/2018
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Gregory
      Leigh Lyons
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Chris
      D. Wright
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Dennis
      Mee
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Alan
      Charuk
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Sam
      Hirji
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Herbert
      Moeller
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -





Termination
Payments





Under the
employment agreement entered into with Joseph McQuade, in the event that Mr.
McQuade’s employment is terminated without cause, Mr. McQuade shall be eligible
to receive a termination payment equal to two (2) months’ base
salary.





Director
Compensation





Our
directors are reimbursed for actual expenses incurred in attending Board
meetings.  There is no other compensation arrangement with directors,
and the directors did not receive any compensation in the fiscal years ending
December 31, 2008 and 2007.





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




The
following table sets forth, as of February 17, 2009, the number and percentage
of outstanding shares of our common stock owned by (i) each person known to us
to beneficially own more than 5% of our outstanding common stock, (ii) each
director, (iii) each named executive officer, and (iv) all executive officers
and directors as a group. Share ownership is deemed to include all shares that
may be acquired through the exercise or conversion of any other security
immediately or within the next sixty days. Such shares that may be so acquired
are also deemed outstanding for purposes of calculating the percentage of
ownership for that individual or any group of which that individual is a member.
Unless otherwise indicated, the stockholders listed possess sole voting and
investment power with respect to the shares shown.





Title or Class
                    
                    Name and Address of Beneficial Owner
                      (1)
                    
                    Amount and Nature of
                      Beneficial Ownership (2)
                    
                    
                    Percent of ClassCommon
      Stock
                    
                    Walter
      Merschat(3)
                    
                    
                    2,000,000
                    (5)
                    
                    
                    3.73
                    %Common
      Stock
                    
                    Pillion
      Investments Ltd.(4)
                    
                    
                    4,000,000
                    (5)
                    
                    
                    7.46
                    %Common
      Stock
                    
                    Jon
      Clement Nicolaysen(3)
                    
                    
                    4,000,000
                    (5)
                    
                    
                    7.46
                    %Common
      Stock
                    
                    Ownership
      of all directorsand
      officers as a group
                    
                    
                    10,000,000
                    
                    
                    
                    18.42
                    %





33





(1)
            Unless otherwise noted, the
      security ownership disclosed in this table is of record and
      beneficial.





(2)
            Under Rule 13-d under the
      Exchange Act, shares not outstanding but subject to options, warrants,
      rights, conversion privileges pursuant to which such shares may be
      acquired in the next 60 days are deemed to be outstanding for the purpose
      of computing the percentage of outstanding shares owned by the persons
      having such rights, but are not deemed outstanding for the purpose of
      computing the percentage for such other
  persons.





(3)
            Address
      is 123 West 1stStreet, Suite 215, Casper, Wyoming
82601.





(4)
            Pillion
      Investments Ltd. is wholly-owned by Chris D. Wright, one of our directors.
      Address is 2410-650 West Georgia, Vancouver, British Columbia, Canada
      V6B4N7





(5)
            These shares are restricted.
      After these shares have been held for six months, Walter Merschat, Jon
      Nicolaysen and Pillion Investments Ltd. could sell 1% of the outstanding
      stock in Ameriwest every three months. Therefore, this stock can be sold
      after the expiration of six months in compliance with the provisions of
      Rule 144. There are “stock transfer” instructions placed against these
      certificates and a legend has been imprinted on the stock certificates
      themselves.





We do not
know of any other shareholder who has more than 5 percent of the issued
shares.





There are
no voting trusts or similar arrangements known to us whereby voting power is
held by another party not named herein. We know of no trusts, proxies, power of
attorney, pooling arrangements, direct or indirect, or any other contract
arrangement or device with the purpose or effect of divesting such person or
persons of beneficial ownership of our common shares or preventing the vesting
of such beneficial ownership.





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





Related Party
Transactions




Our board
of directors has adopted a code of ethics, which prohibits conflicts of interest
between a director, officer or employee and the Company. The code requires
directors, officers and employees to inform the Company of any transaction that
involves related parties and that may give rise to a conflict of interest. Our
board reviews related party transactions on an ongoing basis to prevent
conflicts of interest. Our board reviews a transaction in light of the
affiliations of the director, officer or employee and the affiliations of such
person’s immediate family. Transactions are presented to our board for approval
before they are entered into or, if this is not possible, for ratification after
the transaction has occurred. If our board finds that a conflict of interest
exists, then it will determine the appropriate remedial action, if any. Our
board approves or ratifies a transaction if it determines that the transaction
is consistent with the best interests of the Company.





Our
President and Chairman, Walter Merschat, owns fifty percent of Muddy Minerals,
LLC, a Wyoming corporation that holds 99.5% working interest in the South
Glenrock “C” oil field in Converse County, Wyoming. As previously disclosed in a
current report on Form 8-K filed with the SEC on August 27, 2007, we entered
into an agreement and subsequent amendments to acquire such interest for
$4,000,000. Mr.
Merschat’s interest if we conclude the acquisition would be approximately
$2,000,000. On May 1, 2008, Muddy assigned all of its ongoing revenues from such
oil field to us.  In addition, Mr. Merschat is the sole owner of
Geochem Exploration, LLC, a Wyoming limited liability company that holds 100%
working interest in the Skull Valley Prospect in Tooele County, Utah. As
previously disclosed in a current report on Form 8-K filed with the SEC on June
2, 2008, we acquired such interest for $400,000.





One of
our directors, Jon Clement Nicolaysen, owns fifty percent of Muddy Minerals,
LLC, a Wyoming corporation that holds 99.5% working interest in the South
Glenrock “C” oil field in Converse County, Wyoming. As previously disclosed in a
current report on Form 8-K filed with the SEC on August 27, 2007, the Company
entered into an agreement and subsequent amendments to acquire such interest for
$4,000,000. Mr. Nicolaysen’s interest if the Company concludes the acquisition
would be approximately $2,000,000. On May 1, 2008, Muddy assigned all of its
ongoing revenues from such oil field to us.


34


We
entered into an employment agreement with our Operations Manager, Reed Merschat
effective August 15, 2008.  Mr. Merschat is a child of our President
and Chairman.  Under the terms of the agreement, we agreed to
compensate Mr. Merschat $7,000 per month.  Additionally, on September
24, 2008, our Board granted him the option to purchase 500,000 shares of our
common stock at an exercise price of $0.38 vesting in equal portions over 2
years.


Director
Independence





During
2008, our board of directors evaluated all business relationships between the
Company and the Company’s non-employee directors and all other relevant facts
and circumstances and, as required by our Code of Ethics, determined that each
such director is an independent director as defined by the standards for
director independence established by applicable laws, rules, and listing
standards including, without limitation, the standards for independent directors
established by The New York Stock Exchange, Inc., The NASDAQ National Market,
and the Securities and Exchange Commission.




Subject
to some exceptions, these standards generally provide that a director will not
be independent if (a) the director is, or in the past three years has been,
an employee of ours; (b) a member of the director’s immediate family is, or
in the past three years has been, an executive officer of ours; (c) the
director or a member of the director’s immediate family has received more than
$120,000 per year in direct compensation from us other than for service as a
director (or for a family member, as a non-executive employee); (d) the
director or a member of the director’s immediate family is, or in the past three
years has been, employed in a professional capacity by Malone & Bailey, PC,
the Company’s independent public accountants, or has worked for such firm in any
capacity on the Company’s audit; (e) the director or a member of the
director’s immediate family is, or in the past three years has been, employed as
an executive officer of a company where one of our executive officers serves on
the compensation committee; or (f) the director or a member of the
director’s immediate family is an executive officer of a company that makes
payments to, or receives payments from, us in an amount which, in any
twelve-month period during the past three years, exceeds the greater of
$1,000,000 or two percent of that other company’s consolidated gross
revenues.





ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES




The
following table shows the fees paid or accrued by us for the audit and other
services provided by Cordovano and Honeck, LLP for the fiscal periods
shown.





December 31, 2008
                
                
                December 31, 2007Audit
      Fees
                
                $
                
                
                
                $
                12,490Audit
      — Related Fees
                
                
                —
                
                
                
                —Tax
      Fees
                
                __
                
                
                
                —All
      Other Fees
                
                
                —
                
                
                
                —Total
                
                $
                
                
                
                $
                12,490





The following table shows the
fees paid or accrued by us for the audit and other services provided by Malone
& Bailey, PC for the fiscal periods shown.





December 31, 2008
                  
                  
                  December 31, 2007Audit
      Fees
                  
                  $
                  94,000
                  
                  
                  $
                  15,000Audit
      — Related Fees
                  
                  
                  
                  
                  
                  
                  —Tax
      Fees
                  
                  
                  
                  
                  
                  
                  —All
      Other Fees
                  
                  
                  
                  
                  
                  
                  —Total
                  
                  $
                  
                  
                  
                  $
                  15,000





Audit
fees consist of fees billed for professional services rendered for the audit of
our financial statements and review of the interim financial statements included
in quarterly reports and services that are normally provided by the above
auditors in connection with statutory and regulatory fillings or
engagements


35


In the
absence of a formal audit committee, the full Board of Directors pre-approves
all audit and non-audit services to be performed by the independent registered
public accounting firm in accordance with the rules and regulations promulgated
under the Securities Exchange Act of 1934, as amended. The Board of Directors
pre-approved 100% of the audit, audit-related and tax services performed by the
independent registered public accounting firm in fiscal 2008. The percentage of
hours expended on the principal accountant's engagement to audit the Company's
financial statements for the most recent fiscal year that were  attributed
to work performed by persons other than the principal accountant's full-time,
permanent employees was 0%.


36


PART
IV




ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES




Exhibits





The
following exhibits are included as part of this report by
reference:





3.1(1)
              
              Articles
      of Incorporation, as amended3.2(2)
              
              Bylaws10.1(3)
              
              Assignment
      Agreement dated August 24, 2007 between South Sea Energy Corp. and Pin
      Petroleum Partners Ltd.10.3(5)
              
              Management
      and governance consultant agreement between Ameriwest Energy Corp. and
      Sound Energy Advisors LLC, dated December 21, 2007.10.4(5)
              
              Settlement
      Agreement dated January 14, 200810.5(5)
              
              Settlement
      Agreement dated January 23, 200810.6(5)
              
              Settlement
      Agreement dated January 23, 200810.7(5)
              
              Finder’s
      Fee Agreement dated March 1, 200810.8(6)
              
              Exclusive
      Option to Purchase dated March 19, 2008 with Hot Springs Resources,
      Ltd.10.9(7)
              
              Exclusive
      Option to Purchase dated April 15, 2008 with Alpha Development Corporation
      and JK Minerals, Inc.10.10(8)
              
              Settlement
      Agreement dated April 16, 2008 with Penson Financial Services Canada,
      Fordham Financial Management, Inc., First Clearing LLC and Penson
      Financial Services, Inc.10.11(9)
              
              Assignment
      of Revenues dated May 1, 2008 with Muddy Minerals Exploration,
      LLC10.12(10)
              
              Purchase
      and Sale Agreement dated May 30, 2008 with Geochem Exploration,
      LLC10.13(10)
              
              Third
      Amendment to LOI dated May 31, 2008 with Muddy Minerals Exploration,
      LLC10.14(11)
              
              Employment
      Agreement dated June 5, 2008 with Joseph J. McQuade10.15(12)
              
              Farmout
      and AMI Agreement dated August 21, 2008 with Tyler Rockies Exploration
      Ltd.10.16
              
              Fourth
      Amendment to LOI dated September 1, 2008 with Muddy Mineral Exploration,
      LLC10.17(13)
              
              2008
      Equity Incentive Plan10.18
              
              Amendment
      No. 1 to Assignment of Revenues, dated February 17,
  2009


37





10.19
              
              Farmout
      Agreement dated February 25, 2009 with Wold Oil Properties,
      Inc.10.20(14)
              
              Agreement
      to Operate South Glenrock and Extension of Purchase Agreement dated March
      30, 2009 with Muddy Mineral Exploration, LLC14.1
              
              Code
      of Ethics16(4)
              
              Letter
      regarding change in certifying accountant.99.1
              
              Rule
      13(a) — 14(a)/15(d) — 14(a) Certification (Principal Executive
      Officer)99.2
              
              Rule
      13(a) — 14(a)/15(d) — 14(a) Certification (Principal Financial
      Officer)99.3
              
              Section
      1350 Certifications




(1)
            Incorporated by reference from
      Registration Statement on Form SB-2 filed on February 1, 2005, Form 8-K
      filed on June 19, 2007, and Form 8-K filed on August 27,
      2007.


(2)
            Incorporated
      by reference from Registration Statement on Form SB-2 filed on February 1,
      2005.


(3)
            Incorporated
      herein by reference to exhibits previously filed on Registrant’s Current
      Report on Form 8-K, filed on August 27,
2007.


(4)
            Incorporated
      herein by reference to exhibits previously filed on Registrant’s Current
      Report on Form 8-K, filed on December 6,
2007.


(5)
            Incorporated
      herein by reference to exhibits previously filed on Registrant’s Annual
      Report on Form 10-K, filed on April 15,
2008.


(6)
            Incorporated
      by reference to exhibits previously filed on Registrant’s Current Report
      on Form 8-K filed on March 19,
2008.


(7)
            Incorporated
      by reference to exhibits previously filed on Registrant’s Current Report
      on Form 8-K filed on April 17,
2008.


(8)
            Incorporated
      by reference to exhibits previously filed on Registrant’s Quarterly Report
      on Form 10-Q filed on May 15, 2008.


(9)
            Incorporated
      by reference to exhibits previously filed on Registrant’s Quarterly Report
      on Form 10-Q filed on August 19,
2008.


(10)
            Incorporated
      by reference to exhibits previously filed on Registrant’s Current Report
      on Form 8-K filed on June 2, 2008.


(11)
            Incorporated
      by reference to exhibits previously filed on Registrant’s Current Report
      on Form 8-K filed on June 9, 2008.


(12)
            Incorporated
      herein by reference to exhibits previously filed on Registrant’s Current
      Report on Form 8-K filed on August 27,
2008.


(13)
            Incorporated
      herein be reference to exhibits previously filed on Registrant’s
      definitive revised proxy statement on Schedule 14A filed on August 11,
      2008 for the Annual Meeting held on September 2,
  2008.


(14)
            Incorporated
      herein by reference to exhibits previously filed on Registrant’s Current
      Report on Form 8-K filed on April 2,
2009.


38


SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) the Registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.





AMERIWEST
      ENERGY CORP.Dated:
      April 17, 2009
              /s/Walter
      MerschatBy:
      Walter MerschatIts:
      President and Chairman of the Board (Principal Executive
                Officer)Dated:
      April 17, 2009
              /s/Joseph J.
      McQuadeBy:
      Joseph J. McQuadeIts:
      Chief Financial Officer (Principal Financial Officer and
                Principal
      Accounting Officer)





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





Signature
                
                Capacity
                
                Date/s/Walter
      Merschat
                
                Director
                
                April
      17, 2009Walter
      Merschat/s/Chris D.
      Wright
                
                Director
                
                April
      17, 2009Chris
      D. Wright/s/Jon Clement
      Nicolaysen
                
                Director
                
                April
      17, 2009Jon
      Clement Nicolaysen




39


Ameriwest
Energy Corp.
 Index
to Financial Statements
 December
31, 2008
 
 INDEX
 
 PageIndependent
      Registered Public Accounting Firms’ Reports
                      F-42Financial
      StatementsBalance
      Sheets
                      F-43Statements
      of Operations
                      F-44Statements
      of Stockholder’s Deficiency
                      F-45Statements
      of Cash Flows
                      F-46Notes
      to Financial Statements
                      F-47
  40
  Ameriwest
Energy Corp.
 
 Financial
Statements
 December
31, 2008
  F-41
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors
 Ameriwest
Energy Corporation
 
 We have
audited the accompanying balance sheets of Ameriwest Energy Corporation,
(“Ameriwest”) as of December 31, 2008 and 2007 and the related statements of
operations, changes in stockholders’ equity (deficit) and cash flows for the two
years then ended. These financial statements are the responsibility of
Ameriwest’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
 
 In our
opinion, the  financial statements referred to above present fairly,
in all material respects, the  financial position of Ameriwest as of
December 31, 2008 and 2007 and the  results of its operations and its
cash flows for the two years then ended in conformity with accounting principles
generally accepted in the United States of America.
  The
accompanying financial statements have been prepared assuming that Ameriwest
will continue as a going concern. As discussed in Note 3 to the financial
statements, Ameriwest has negative working capital and suffered recurring losses
from operations, which raises substantial doubt about its ability to continue as
a going concern. Management’s plans regarding those matters are described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 
 MALONE
& BAILEY, PC
 www.malone-bailey.com
 Houston,
Texas
 
 April 15,
2009
  F-42
  Ameriwest Energy Corp.
 (A Development
Stage Company)
 Balance
Sheets
 
 December 31, 2008
                                        
                                        
                                        December 31, 2007ASSETSCurrentCash
                                        
                                        $
                                        51,174
                                        
                                        
                                        $
                                        245Receivable
                                        
                                        
                                        6,378
                                        
                                        
                                        
                                        -Prepaid expenses and
deposit
                                        
                                        
                                        27,005
                                        
                                        
                                        
                                        10,355Total
      current assets
                                        
                                        
                                        84,557
                                        
                                        
                                        
                                        10,600Furniture &
      equipment,net
                                        
                                        
                                        4,419
                                        
                                        
                                        
                                        -Oil
      and gas properties
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Deferred
      acquisition costs
                                        
                                        
                                        -
                                        
                                        
                                        
                                        1,758,653Restricted
      cash - reclammation bond
                                        
                                        
                                        100,000
                                        
                                        
                                        
                                        -Deferred financing costs
                                        
                                        
                                        64,116
                                        
                                        
                                        
                                        -Total assets
                                        
                                        $
                                        253,092
                                        
                                        
                                        $
                                        1,769,253LIABILITIES
      and SHAREHOLDERS' EQUITYCurrentAccounts
      payable and accrued liabilities
                                        
                                        $
                                        1,021,821
                                        
                                        
                                        $
                                        753,640Due
      to related parties
                                        
                                        
                                        377,722
                                        
                                        
                                        
                                        -Interest
      on convertible notes
                                        
                                        
                                        184,386
                                        
                                        
                                        
                                        26,968Current portion of convertible notes, net of
      discount
                                        
                                        
                                        768,848
                                        
                                        
                                        
                                        456,946Total current liabilities
                                        
                                        
                                        2,352,777
                                        
                                        
                                        
                                        1,237,554Long term portion of
      convertible notes, net of discount
                                        
                                        
                                        893,127
                                        
                                        
                                        
                                        61,560Asset retirement obligation,net
                                        
                                        
                                        32,860
                                        
                                        
                                        
                                        -STOCKHOLDERS'
      EQUITYCapital
      stock 720,000,000 common stock authorized, $0.001 par value 54,278,002 and
      53,611,334 shares outstanding at December 31, 2008 and 2007,
      respectively
                                        
                                        
                                        54,278
                                        
                                        
                                        
                                        53,611Additional
      paid-in capital
                                        
                                        
                                        3,526,148
                                        
                                        
                                        
                                        1,390,980Deficit
      accumulated during development stage
                                        
                                        
                                        (6,606,098
                                        )
                                        
                                        
                                        (974,452
                                        )Total stockholders' equity
      (deficit)
                                        
                                        
                                        (3,025,672
                                        )
                                        
                                        
                                        470,139Total liabilities and stockholders'
      equity
                                        
                                        $
                                        253,092
                                        
                                        
                                        $
                                        1,769,253Commitment and legal
      claim (notes 12 and 13)
 
 The
accompanying notes are an integral part of these audited financial
statements.
  F-43
  Ameriwest
Energy Corp.
 (A Development Stage
Company)
 Statements
of Operations
 For
the Years Ended December 31, 2008 and 2007
 And for the Period
from January 3, 2001 [Inception] to December 31, 2008
  
  December
      31,
                                                              
                                                              
                                                              Cumulative
      from January
      3, 2001[Inception]
      to2008
                                                              
                                                              
                                                              2007
                                                              
                                                              
                                                              December 31, 2008Operator
      fees, Net
                                                              
                                                              $
                                                              28,318
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              $28,318ExpensesContribution
      rent
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              1,650
                                                              
                                                              
                                                              
                                                              41,250Contribution
      services
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              5,534
                                                              
                                                              
                                                              
                                                              45,621Compensation
                                                              
                                                              
                                                              295,272
                                                              
                                                              
                                                              
                                                              49,214
                                                              
                                                              
                                                              
                                                              344,486Acquisition
      and exploration costs
                                                              
                                                              
                                                              3,925,066
                                                              
                                                              
                                                              
                                                              183,230
                                                              
                                                              
                                                              
                                                              4,126,761Marketing
      and investor relations
                                                              
                                                              
                                                              249,145
                                                              
                                                              
                                                              
                                                              148,276
                                                              
                                                              
                                                              
                                                              397,421Accretion
      of asset retirement obligation
                                                              
                                                              
                                                              2,684
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              2,684Office,
      general and administrative expenses
                                                              
                                                              
                                                              175,566
                                                              
                                                              
                                                              
                                                              36,789
                                                              
                                                              
                                                              
                                                              218,929Professional
      fees
                                                              
                                                              
                                                              319,357
                                                              
                                                              
                                                              
                                                              135,890
                                                              
                                                              
                                                              
                                                              507,777Total
      operating expenses
                                                              
                                                              
                                                              (4,967,090
                                                              )
                                                              
                                                              
                                                              (560,583
                                                              )
                                                              
                                                              
                                                              (5,941,542
                                                              )Net
      income (loss) from operations
                                                              
                                                              
                                                              (4,938,772
                                                              )
                                                              
                                                              
                                                              (560,583
                                                              )
                                                              
                                                              
                                                              (5,913,224
                                                              )Interest
      income
                                                              
                                                              
                                                              83
                                                              
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              83Interest
      expense
                                                              
                                                              
                                                              (692,957
                                                              )
                                                              
                                                              
                                                              (254,768
                                                              )
                                                              
                                                              
                                                              (947,725
                                                              )Net
      loss for the period
                                                              
                                                              $
                                                              (5,631,646
                                                              )
                                                              
                                                              $
                                                              (815,351
                                                              )
                                                              
                                                              $
                                                              (6,606,098
                                                              )Loss
      per share - basic and diluted
                                                              
                                                              $
                                                              (0.10
                                                              )
                                                              
                                                              $
                                                              (0.01
                                                              )Weighted
      Average Shares Outstanding
                                                              
                                                              
                                                              54,087,525
                                                              
                                                              
                                                              
                                                              54,903,262
 
 The
accompanying notes are an integral part of these audited financial
statements.
  F-44
  Ameriwest
Energy Corp.
 (A Development
Stage Company)
 Statement
of Shareholders' Equity (Deficit)
 For
the period from January 3, 2001 [Inception] to December 31,
2008








DeficitAccumulatedAdditional
                      
                      
                      during
                      
                      
                      TotalCommon Stock
                      
                      
                      Paid-In
                      
                      
                      Exploration
                      
                      
                      Stockholder'sShares
                      
                      
                      Amount
                      
                      
                      Capital
                      
                      
                      Stage
                      
                      
                      EquityBalance,
      December 31, 2006
                      
                      
                      46,980,000
                      
                      
                      $
                      46,980
                      
                      
                      $
                      51,207
                      
                      
                      $
                      (159,101
                      )
                      
                      $
                      (60,914
                      )Contributed
      rent and services
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      7,184
                      
                      
                      
                      
                      
                      
                      
                      7,184Stock
      issued for cash at $0.01
                      
                      
                      5,548,000
                      
                      
                      
                      5,548
                      
                      
                      
                      49,932
                      
                      
                      
                      
                      
                      
                      
                      55,480Stock
      issued for cash to related parties at $0.001
                      
                      
                      26,000,000
                      
                      
                      
                      26,000
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      26,000Discounts
      and beneficial conversion features on convertible notes
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      666,240
                      
                      
                      
                      
                      
                      
                      
                      666,240Stock
      returned to treasury
                      
                      
                      (26,000,000
                      )
                      
                      
                      (26,000
                      )
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (26,000
                      )Stock
      issued for cash at $0.60, net of offering costs of $32,500
                      
                      
                      1,083,334
                      
                      
                      
                      1,083
                      
                      
                      
                      616,417
                      
                      
                      
                      
                      
                      
                      
                      617,500Net loss for the year
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (815,351
                      )
                      
                      
                      (815,351
                      )Balance,
      December 31, 2007
                      
                      
                      53,611,334
                      
                      
                      
                      53,611
                      
                      
                      
                      1,390,980
                      
                      
                      
                      (974,452
                      )
                      
                      
                      470,139Stock
      issued for cash at $0.60, net of offering costs of $20,000
                      
                      
                      666,668
                      
                      
                      
                      667
                      
                      
                      
                      379,333
                      
                      
                      
                      
                      
                      
                      
                      380,000Discounts
      and beneficial conversion features on convertible notes
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,643,687
                      
                      
                      
                      
                      
                      
                      
                      1,643,687Stock
      based compensation
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      112,147
                      
                      
                      
                      
                      
                      
                      
                      112,147Net loss for the period
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (5,631,646
                      )
                      
                      
                      (5,631,646
                      )Balance,
      December 31, 2008
                      
                      
                      54,278,002
                      
                      
                      
                      54,278
                      
                      
                      
                      3,526,147
                      
                      
                      
                      (6,606,098
                      )
                      
                      
                      (3,025,673
                      )





The
accompanying notes are an integral part of these audited financial
statements.





F-45





Ameriwest
Energy Corp.


(A Development
Stage Company)


Statements
of Cash Flows


For
the Years Ended December 31, 2008 and 2007


And for the Period
from January 3, 2001 [Inception] to December 31, 2008










December
      31,
                                                                                        
                                                                                        
                                                                                        Cumulative
      from
                                                                                          January
      3, 2001
                                                                                          [Inception]
      to2008
                                                                                        
                                                                                        
                                                                                        2007
                                                                                        
                                                                                        
                                                                                        December
      31, 2008Cash
      Flows from Operating ActivitiesNet
      loss from operations
                                                                                        
                                                                                        $
                                                                                        (5,631,646
                                                                                        )
                                                                                        
                                                                                        $
                                                                                        (815,351
                                                                                        )
                                                                                        $
                                                                                        (6,606,098
                                                                                        )Items
      not affecting cash:-
      write-off of deferred acquisition costs
                                                                                        
                                                                                        
                                                                                        3,925,066
                                                                                        
                                                                                        
                                                                                        
                                                                                        183,230
                                                                                        
                                                                                        
                                                                                        4,108,296-
      contributed rent and services
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        7,184
                                                                                        
                                                                                        
                                                                                        94,055-
      amortization of debt discount
                                                                                        
                                                                                        
                                                                                        507,156
                                                                                        
                                                                                        
                                                                                        
                                                                                        254,768
                                                                                        
                                                                                        
                                                                                        761,924-
      amortization of deferred financing costs
                                                                                        
                                                                                        
                                                                                        28,384
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        28,384-
      depreciation
                                                                                        
                                                                                        
                                                                                        3,461
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        3,461-
      accretion of asset retirement obligation
                                                                                        
                                                                                        
                                                                                        2,684
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        2,684-
      stock based compensation
                                                                                        
                                                                                        
                                                                                        112,147
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        112,147Changes
      in non-cash working capital balances related to
operations:-
      prepaid expenses and deposits
                                                                                        
                                                                                        
                                                                                        (16,650
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (8,855
                                                                                        )
                                                                                        
                                                                                        (27,005
                                                                                        )-
      receivable
                                                                                        
                                                                                        
                                                                                        (6,378
                                                                                        )
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        (6,378
                                                                                        )-
      due to related parties
                                                                                        
                                                                                        
                                                                                        177,722
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        177,722- accounts payable and accrued
      expenses
                                                                                        
                                                                                        
                                                                                        294,778
                                                                                        
                                                                                        
                                                                                        
                                                                                        727,341
                                                                                        
                                                                                        
                                                                                        1,048,417Cash Flows from Operating
      Activities
                                                                                        
                                                                                        
                                                                                        (603,276
                                                                                        )
                                                                                        
                                                                                        
                                                                                        348,317
                                                                                        
                                                                                        
                                                                                        (309,575
                                                                                        )Cash
      flows from Investing ActivitiesAcquisition
      of furniture and equipment
                                                                                        
                                                                                        
                                                                                        (4,998
                                                                                        )
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        (4,998
                                                                                        )Cash
      paid for reclammation bond
                                                                                        
                                                                                        
                                                                                        (100,000
                                                                                        )
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        (100,000
                                                                                        )Cash
      refunded for deferred acquisition costs
                                                                                        
                                                                                        
                                                                                        22,286
                                                                                        
                                                                                        
                                                                                        
                                                                                        26,000
                                                                                        
                                                                                        
                                                                                        48,286Cash paid for acquisition
    costs
                                                                                        
                                                                                        
                                                                                        (1,840,583
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (1,967,883
                                                                                        )
                                                                                        
                                                                                        (3,808,466
                                                                                        )Cash Flows Provided from
      Investing  Activities
                                                                                        
                                                                                        
                                                                                        (1,923,295
                                                                                        )
                                                                                        
                                                                                        
                                                                                        (1,941,883
                                                                                        )
                                                                                        
                                                                                        (3,865,178
                                                                                        )Cash
      flows from Financing ActivitiesProceeds
      from convertible notes
                                                                                        
                                                                                        
                                                                                        2,280,000
                                                                                        
                                                                                        
                                                                                        
                                                                                        956,946
                                                                                        
                                                                                        
                                                                                        3,236,946Proceeds
      from related party debt
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        (36,047
                                                                                        )
                                                                                        
                                                                                        (36,047
                                                                                        )Debt
      issuance costs
                                                                                        
                                                                                        
                                                                                        (82,500
                                                                                        )
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        (82,500
                                                                                        )Cash
      overdraft
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        (68
                                                                                        )
                                                                                        
                                                                                        (68
                                                                                        )Proceeds from issue of common
      stock
                                                                                        
                                                                                        
                                                                                        380,000
                                                                                        
                                                                                        
                                                                                        
                                                                                        672,980
                                                                                        
                                                                                        
                                                                                        1,071,480Cash Flows from
      Financing  Activities
                                                                                        
                                                                                        
                                                                                        2,577,500
                                                                                        
                                                                                        
                                                                                        
                                                                                        1,593,811
                                                                                        
                                                                                        
                                                                                        4,225,926Net
      increase (decrease) in cash
                                                                                        
                                                                                        
                                                                                        50,929
                                                                                        
                                                                                        
                                                                                        
                                                                                        245
                                                                                        
                                                                                        
                                                                                        51,174Cash, beginning of period
                                                                                        
                                                                                        
                                                                                        245
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        245Cash, end of period
                                                                                        
                                                                                        $
                                                                                        51,174
                                                                                        
                                                                                        
                                                                                        $
                                                                                        245
                                                                                        
                                                                                        $
                                                                                        51,419SUPPLEMENTAL
      CASH DISCLOSURESCash
      paid for:Income
      taxes
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        $
                                                                                        -Interest
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        $
                                                                                        -SUPPLEMENTAL
      NON-CASH DISCLOSURESAsset
      retirement liability
                                                                                        
                                                                                        $
                                                                                        30,176
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        $
                                                                                        30,176Acquisition
      costs included in accounts payable and related party accounts
      payable
                                                                                        
                                                                                        $
                                                                                        330,822
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        330,822Discount
      on convertible notes from beneficial conversion features
                                                                                        
                                                                                        $
                                                                                        1,643,688
                                                                                        
                                                                                        
                                                                                        $
                                                                                        -
                                                                                        
                                                                                        $
                                                                                        1,643,688





The
accompanying notes are an integral part of these audited financial
statements.





F-46





Ameriwest
Energy Corp.


(A Development Stage
Company)


Notes
to Financial Statements


December
31, 2008





1.    Nature
of operations




Ameriwest
Energy Corp. was incorporated in Nevada on January 3, 2001 under the name Henley
Ventures Inc. for the purpose of acquiring and developing mineral properties. No
minerals were discovered on the properties.  During the year ended
December 31, 2007, Ameriwest changed its business and commenced concentrating on
the acquisition, exploration, development and production of oil and gas
assets.  On August 28, 2007, Ameriwest changed its name to Ameriwest
Energy Corp.





2.
            Summary
      of significant accounting policies





The
financial statements of Ameriwest have been prepared in accordance with
generally accepted accounting principles in the United States of
America.  Because a precise determination of many assets and
liabilities is dependent upon future events, the preparation of financial
statements for a period necessarily involves the use of estimates, which have
been made using careful judgment.  Actual results may vary from these
estimates.





The
financial statements have, in management’s opinion, been properly prepared
within the framework of the significant accounting policies summarized
below:





a.
            Deferred
      financing costs


Costs
directly associated with issuance of equity are deferred until Ameriwest has
issued the shares of common stock.  Costs directly associated with the
issuance of debt are capitalized and amortized over the term of the note using
the interest method.





b.
            Full
      costs method


Ameriwest
uses the full cost method of accounting for exploration and development
activities as defined by SEC Regulation S-X Rule 4-10. Under this method of
accounting, the costs of unsuccessful, as well as successful, exploration and
development activities are capitalized as property and equipment. This includes
any internal costs that are directly related to exploration and development
activities but does not include any costs related to production, general
corporate overhead or similar activities. Gain or loss on the sale or other
disposition of oil and gas properties is not recognized, unless the gain or loss
would significantly alter the relationship between capitalized costs and proved
reserves of oil and natural gas attributable to a country. The application of
the full cost method of accounting for oil and gas properties generally results
in higher capitalized costs and higher depreciation and amortization rates
compared to the successful efforts method of accounting for oil and gas
properties.





Costs
excluded


Properties
and equipment include costs that are excluded from costs being depreciated or
amortized. Oil and gas costs excluded represent investments in unproved
properties and major development projects in which we own a direct interest.
These unproved property costs include nonproducing leasehold, geological and
geophysical costs associated with leasehold or drilling interests and
exploration drilling costs. Ameriwest excludes these costs on a
country-by-country basis until proved reserves are found or until it is
determined that the costs are impaired. All costs excluded are reviewed at least
quarterly to determine if impairment has occurred.





The
amount of any impairment is transferred to the capitalized costs being amortized
(the depletion, depreciation and amortization) or a charge is made against
earnings for those international operations where a reserve base has not yet
been established. Impairments transferred to the depletion, depreciation and
amortization increase the depletion, depreciation and amortization rate for that
country. For international operations where a reserve base has not yet been
established, an impairment requiring a charge to earnings may be indicated
through evaluation of drilling results, relinquishing drilling rights or other
information.





At
December 31, 2008 and 2007, Ameriwest’s oil and gas interests and deferred
acquisitions costs were located in one geographical segment, being the United
States of America.





F-47




Ceiling
test


The full
cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule
4-10. Under full cost accounting rules for each cost center, capitalized costs
of unproved and proved properties, less accumulated amortization and related
deferred income taxes, shall not exceed an amount (the "cost ceiling") equal to
the sum of (a) the present value of future net cash flows from estimated
production of proved oil and gas reserves, based on current economic and
operating condition, discounted at 10 percent, plus (b) the cost of properties
not being amortized, plus (c) the lower of cost or estimated fair value of any
unproved properties included in the costs being amortized, less (d) any income
tax effects related to differences between the book and tax basis of the
properties involved. If capitalized costs exceed this limit, the excess is
charged as an impairment expense. At December 31, 2008, Ameriwest has reviewed
these capitalized costs for impairment and determined that the total costs were
subject to impairment.





Amortization


Capitalized
costs within a cost center amortized on the unit-of-production basis using
proved oil and gas reserves include: (i) all capitalized costs, less accumulated
amortization; (ii) the estimated future expenditures (based on current costs) to
be incurred in developing proved reserves; and (iii) estimated dismantlement and
abandonment costs, net of estimated salvage values.  Capitalized costs
subject to amortization do not include the excluded costs as described
above.





c.
            Stock
      based compensation


Ameriwest
recognizes stock based compensation expense and other forms of employee equity
compensation in accordance with SFAS No. 123R,Share-Based Payment, as
interpreted by SEC Staff Accounting Bulletin No. 107.





d.
            Recent
      accounting pronouncements


In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities”
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting
and, therefore, need to be included in computing earnings per share under the
two-class method described in SFAS No. 128, “Earnings Per Share.” FSP EITF
03-6-1 is effective for the Company as of January 1, 2009 and in accordance with
its requirements it will be applied retrospectively. The Company does not expect
the adoption of FSP EITF 03-6-1 to have a material impact on its consolidated
financial statements.  In December 2008, the Securities and Exchange
Commission (“SEC”) adopted the final rules regarding amendments to current oil
and gas reporting requirements. The amendments are designed to modernize and
update the oil and gas disclosure requirements to align them with current
practices and changes in technology. The amendments are effective for annual
reports on Form 10-K for fiscal years ending on or after December 31, 2009. The
Company is currently evaluating the impact of the amendments on its consolidated
financial position, results of operations and cash flows.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”, which identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States of America (the GAAP hierarchy).  This Statement is
effective 60 days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles”.The Company does
not expect adoption of SFAS 162 to have a material effect on its financial
statements or related disclosures.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133”.  SFAS 161 requires entities that utilize derivative
instruments to provide qualitative disclosures about their objectives and
strategies for using such instruments, as well as any details of
credit-risk-related contingent features contained within
derivatives.  SFAS 161 also requires entities to disclose additional
information about the amounts and location of derivatives located within the
financial statements, how the provisions of SFAS 133 has been applied, and the
impact that hedges have on an entity’s financial position, financial
performance, and cash flows.  SFAS 161 is effective for fiscal years
and interim periods beginning after November 15, 2008, with early application
encouraged.  The Company currently does not anticipate the adoption of
SFAS 161 will have a material impact on the disclosures already
provided.
 
 In
December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which
revises SFAS No. 141 and changes multiple aspects of the accounting for business
combinations. SFAS No. 141R requires the acquirer to recognize most identifiable
assets acquired, liabilities assumed, and non-controlling interests in the
acquiree at their full fair value on the acquisition date. Goodwill is to be
recognized as the excess of the consideration transferred plus the fair value of
the non-controlling interest over the fair values of the identifiable net assets
acquired. Subsequent changes in the fair value of contingent consideration
classified as a liability are to be recognized in earnings, while contingent
consideration classified as equity is not to be re-measured. Costs such as
transaction costs are to be excluded from acquisition accounting, generally
leading to recognizing expense and additionally, restructuring costs that do not
meet certain criteria at acquisition date are to be subsequently recognized as
post-acquisition costs. SFAS No. 141R is effective for business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The Company is
currently evaluating the impact that this issuance will have on its financial
position and results of operations.
 
 In
September 2006, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 157 “Fair Value Measurements”,
which provides expanded guidance for using fair value to measure assets and
liabilities. SFAS 157 establishes a hierarchy for data used to value assets and
liabilities, and requires additional disclosures about the extent to which a
company measures assets and liabilities at fair value, the information used to
measure fair value, and the effect of fair value measurements on earnings.
Implementation of SFAS 157 is required on January 1, 2008. The adoption of SFAS
157 did not have a material impact on Ameriwest’s results of operations or
financial position.


F-48




e.
            Asset
      retirement obligation


Ameriwest
recognizes asset retirement obligations in accordance with FAS No 143 Accounting for Asset Retirement
Obligation.The fair value of a liability is recorded for an
asset retirement obligation in the year in which it is incurred when a
reasonable estimate of fair value can be made.  The carrying amount of
the related long-lived asset is increased by the same amount as the
liability.  Changes in the liability for an asset retirement
obligation due to the passage of time is measured by applying an interest method
of allocation.  The amount is recognized as an increase in the
liability and an accretion expense in the statement of
operations.  Changes resulting from revisions to the timing or the
amount of the original estimate of undiscounted cash flows are recognized as an
increase or a decrease to the carrying amount of the liability and the related
long-lived asset.


f.
            Revenue
      and cost recognition


Ameriwest
uses the sales method of accounting for oil revenues. Under this method,
revenues are recognized based on the actual volumes of oil sold to purchasers.
The volume sold may differ from the volumes to which the Company is entitled
based on its interest in the properties. Costs associated with production are
expensed in the period incurred.  Operator fees for the year ended
December 31, 2008 are recorded net of lease operating expenses, production taxes
and royalties.





g.
            Use
      of estimates


The
financial statements have been prepared in conformity with accounting principles
generally accepted in the United States of America. In preparing financial
statements, Ameriwest makes informed judgments and estimates that affect the
reported amounts of assets and liabilities as of the date of the financial
statements and affect the reported amounts of revenues and expenses during the
reporting period. On an ongoing basis, Ameriwest reviews its estimates,
including those related to such potential matters as litigation, environmental
liabilities, income taxes, determination of proved reserves of oil and gas and
asset retirement obligations.  Changes in facts and circumstances may
result in revised estimates and actual results may differ from these
estimates.





h.
            Impairment
      of long lived assets


In
accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-lived Assets, the carrying value of intangible assets
and other long-lived assets are reviewed on a regular basis for the existence of
facts or circumstances that may suggest impairment.  Ameriwest
recognizes impairment when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the asset.  Impairment
losses, if any, are measured as the excess of the carrying amount of the asset
over its estimated fair value.  Oil and gas properties accounted for
using the full cost method of accounting; a method utilized by Ameriwest, is
excluded from this requirement, but will continue to be subject to the ceiling
test limitations.  There were $3,925,066 in impairment losses in 2008
and $nil in 2007.





F-49





i.
            Convertible
      instruments


When
Ameriwest issues convertible debt with detachable instruments, it allocates the
proceeds received on a relative fair value basis pursuant to EITF Issue No. 98-5
“Accounting for Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios “.  Then, it applies the amount
allocated to the convertible instrument, and an effective conversion price is
calculated and used to measure the intrinsic value, if any, of the embedded
conversion option.  The intrinsic value of the embedded conversion option
and the relative fair value of the detachable instruments are recorded as
discounts to the convertible debt and amortized over the term of the
debt.





When
Ameriwest issues convertible debt with non-detachable instruments, the intrinsic
value of the conversion option is computed based on a comparison of the proceeds
of the convertible instrument allocated to the common stock portion of the
conversion option and the fair value at the commitment date of the common stock
to be received by the holder upon conversion pursuant to EITF Issue No. 00-27
Application of Issue No. 98-5 to Certain Convertible Instruments”. The excess of
the fair value of the common stock at the commitment date over proceeds is the
intrinsic value of the embedded conversion option that is recognized by
Ameriwest at the issuance date for the convertible debt.  The intrinsic
value of the embedded conversion option is recorded as a discount to the
convertible debt and amortized over the term of the debt.





3.
            Going
      concern





These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which assumes that
Ameriwest will be able to meet its obligations and continue its operations for
the next twelve months.  Realization values may be substantially
different from carrying values as shown and these financial statements do not
give effect to adjustments that would be necessary to the carrying values and
classification of assets and liabilities should Ameriwest be unable to continue
as a going concern.  At December 31, 2008, Ameriwest has not yet
achieved profitable operations, has accumulated losses, has a working capital
deficiency and expects to incur further losses in the development of its
business, all of which casts substantial doubt about Ameriwest’s ability to
continue as a going concern. Ameriwest’s ability to continue as a going concern
is dependent upon its ability to generate future profitable operations and/or to
obtain the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due.





Ameriwest
expects to continue to incur substantial losses and will require substantial
capital to execute its business plan and does not expect to attain profitability
in the near future.  Since its inception, Ameriwest has funded
operations through short-term borrowings and equity investments in order to meet
its strategic objectives.  Ameriwest's future operations are dependent
upon external funding and its ability to execute its business plan, realize
sales and control expenses.  Management believes that sufficient
funding will be available from additional borrowings and private placements to
meet its business objectives including anticipated cash needs for working
capital, for a reasonable period of time.  However, there can be no
assurance that Ameriwest will be able to obtain sufficient funds to continue the
development of its business operation.








4.
            Financial
      instruments and concentrations of
risk





a.
            Credit
      risk


Ameriwest
maintains cash deposits with financial institutions, which from time to time may
exceed federally insured limits. Ameriwest has not experienced any losses in
connection with these deposits and believes it is not exposed to any significant
credit risk from cash.





F-50





b.
            Fair
      values


Financial
instruments that are subject to fair disclosure requirements are carried in the
financial statements at amounts that approximate fair value and include cash,
accounts payable and accrued expenses and notes payable.  Fair values are
based on assumptions concerning the amount and timing of estimated future cash
flows and assumed discount rates reflecting varying degrees of
risk.





c.
            Liquidity
      risk


Ameriwest
is exposed to liquidity risk as its continued operations are dependent upon
obtaining additional capital or achieving profitable operations to satisfy its
liabilities as they come due.





d.
            Major
      customer


All of
Ameriwest’s revenue for the year ended December 31, 2008 was from one
customer.





5.
            Oil
      and gas interests





a.
            Skull
      Valley, Utah


On May
30, 2008, Ameriwest entered into a Purchase and Sale Agreement with Geochem
Exploration, LLC, which was based on a Letter of Intent dated November 6, 2007,
as amended on March 14, 2008.  Ameriwest acquired an undivided working
interest and an eighty percent (80%) net royalty interest in and to the Skull
Valley Prospect in Tooele County, Utah, in consideration for an aggregate sum of
$400,000, paid as follows:





i.
            $100,000
      paid on November 29, 2007;


ii.
            $300,000
      paid on May 16, 2008.





Pursuant
Pursuant to SEC Regulation S-X Rule 3-05 and 11-01 and ETIF 98-3:
Determining Whether a
Nonmonetary Transaction Involves Receipt of Productive Assets or of a
Business, Ameriwest determined that the acquisition did not constitute a
business combination. The Skull Valley Prospect was a non-producing asset and
not in the development stage. As such, the transaction is treated as an
acquisition of assets.





By
agreement dated August 25, 2008, Geochem and Ameriwest have agreed to extend the
obligation to spud, drill and complete a well to November 30, 2008, in
consideration for an extension payment of $200,000, due November 30,
2008.





As of
December 31, 2008, Ameriwest had incurred $110 in deferred exploration costs
associated with authorization for expenditures work (“AFE”).  This
sum, in addition to the $400,000 of acquisition costs, has been written down for
impairment.





b.
            Geary
      Prospect, Wyoming


On August
21, 2008, Ameriwest entered into a farmout and area of mutual interest agreement
with Tyler Rockies Exploration, Ltd. (“Tyler”) where in consideration for
$50,000, Ameriwest has the right to earn up to a 50% ownership interest in oil
and gas leasehold rights to approximately 2,800 gross acres within the Geary
Prospect lands located in Natrona and Converse counties,
Wyoming.   Under the terms of the agreement, Ameriwest agreed to
commence drilling of a well on or before May 1, 2009.  Upon drilling 3
wells to the contract depth of the Dakota Formation, Tyler will assign and
convey 50% of its interest to Ameriwest.    Ameriwest will
operate the wells and receive a 75% Net Revenue Interest.  After
payout, on a well by well basis, Tyler will have the option to back in by
furnishing 25% of the actual drilling and completion costs, earning a 25%
working interest. If Tyler opts to back in at a 25% working interest, a 21.125%
Net Revenue Interest would be earned.





As of
December 31, 2008, $50,000 has been paid to Tyler pursuant to the farmout
agreement.  Ameriwest has incurred $3,649 in deferred exploration
costs associated with legal and surveying work.  These costs have been
written down for impairment.





F-51





c.
            South
      Glenrock C Field, Wyoming


On August
24, 2007 and as amended on March 19, 2008, on May 31, 2008 and on September 1,
2008, Ameriwest entered into a letter of intent with Pin Petroleum Partners Ltd.
and Muddy Minerals, LLC, to acquire a 99.5% working interest together with a 78%
net royalty interest in the property referred to as the South Glenrock “C” Oil
Field, located in Converse County, Wyoming, for the aggregate sum of $5,000,000,
payable to Muddy as follow:





i.
            $500,000
      payable on or before July 15, 2007 (paid by Pin on behalf of
      Ameriwest);


ii.
            $500,000
      payable on or before September 1, 2007
(paid);


iii.
            $750,000
      payable on or before October 1, 2007
(paid);


iv.
            $3,250,000
      payable on or before December 15,
2008.





Most of
the oil and gas properties which are the subject of the letter of intent are
non-producing.   In addition, Ameriwest agreed to pay to Muddy
$400,000 ($200,000 paid) as consideration for providing extensions on the
payment dates as well as for interest on the balance due.  The terms
of the acquisition, as amended, are subject to the parties entering into a
definitive agreement on or before December 15, 2008.  Since the
parties have not yet entered into a definitive agreement, Ameriwest has not
recorded obligations or accruals totaling $3,450,000, representing the unpaid
amounts pursuant to the letter of intent, as amended, including $200,000 for
extension fees.





Ameriwest
has accrued $550,000 payable to Pin pursuant to this agreement.





Effective
May 1, 2008, Muddy has assigned its revenues from production to
Ameriwest.  These revenues, amounting to $135,169, are presented in
the statement of operations, net of operating taxes of $22,093 and lease
operating expenses amounting to $81,658.





On May 6,
2008, Ameriwest posted a $100,000 reclamation bond with the Office of State
Lands and Investments of Wyoming.  The funds are being held in trust
by the State, accruing interest at 1.23% per annum.





As of
December 31, 2008, $410,129 of the acquisition costs incurred to date have been
allocated to oil and gas properties for the value of the three producing
wells.  Deferred exploration costs of $161,947 associated with the
preparation of reservoir evaluation are also included in oil and gas properties
on the balance sheet.   These costs, in addition to the remaining
of $1,800,000 in costs accrued to December 31, 2008, have been written down for
impairment.





6.
            Deferred
      Acquisition Costs – Potential
Acquisitions





a.
            Burke
      Ranch, Wyoming


On March
19, 2008, Ameriwest entered into an option agreement with Hot Springs Resources,
Ltd.,  to purchase certain assets of Hot Springs, including: (i)
wells, well bores, leases, contracts, records, books, equipment, buildings,
etc., and (ii) not less than a working interest of 95% at a 79.9% net revenue
interest in certain acreage inside the Burke Ranch Unit, a working interest of
100% at a 82% net revenue Interest in leases outside of the Burke Ranch Unit and
all of Hot Springs’ interest in a leasehold attached to or held by Unit, other
formations and hydrocarbon substances, for the issuance of 400,000 shares of
common stock and the aggregate sum of $4,280,000, payable as
follows:





i.
            $50,000
      payable upon execution of option agreement
  (paid);


ii.
            $50,000
      payable on or before May 18, 2008
(paid);


iii.
              $4,180,000
      payable within 45 days after the exercise of Ameriwest’s option,
      concurrent with the issuance of the 400,000 shares of common
      stock.





F-52





All of
the oil and gas properties which are the subject of the option agreement are
non-producing.  Upon its expiration on July 17, 2008, Ameriwest has
extended this option for an additional 60 calendar days in consideration for
$100,000.  Ameriwest may extend the option for 2 additional 30
calendar days periods in consideration of $100,000 for each additional 30
calendar day period, with half the option extension fees creditable against the
purchase price.  On September 17, 2008, the parties entered into a
verbal agreement to renegotiate the terms of the option when financing for the
project is available.





As of
December 31, 2008, the first two payments of $50,000 each have been made to Hot
Springs pursuant to the option agreement, in addition to the payment of $100,000
for a first extension.  Ameriwest had incurred $1,090 in deferred
exploration costs associated with legal work.  These costs are
included in deferred acquisition costs have been written down for
impairment.





b.
            Cole
      Creek, Wyoming


On April
15, 2008, and as amended on June 25, 2008, Ameriwest entered into an exclusive
option agreement with Alpha Development Corporation and JK Minerals, Inc.
(collectively, “Alpha”) to purchase certain assets of Alpha, including: (i)
wells, well bores, leases, contracts, records, books, equipment, buildings,
etc., of the Cole Creek Unit and adjacent leases; and (ii) Alpha’s working and
net revenue interests in and to all formations that are below the base of the
Shannon Formation, for the aggregate purchase price of $10,000,000.





In
consideration for the option, Ameriwest agreed to pay option fees of $400,000,
payable as follows:





iv.
              $200,000
      payable on April 15, 2008
(paid);


v.
            $200,000
      payable on June 16, 2008 (paid);


vi.
              $200,000
      payable on August 16, 2008
(paid);


vii
              $150,000
      payable on September 17,
2008.





Upon the
expiration of the second option period on August 18, 2008, Ameriwest extended
this option for an additional 30 calendar days in consideration for
$200,000.  Upon the expiration of the extension of the second option
period, Ameriwest could have extended the closing date from September 17, 2008
to October 30, 2008 in consideration for $150,000.  However, Ameriwest
did not further extend its option, and on September 17, 2008, all option and
extension payments were forfeited by Alpha.  Accordingly, as of
December 31, 2008, Ameriwest had incurred $600,000 in options and extension
fees, and $270,846 in deferred exploration costs associated with reservoir
valuation.  These costs are included in deferred acquisition costs
have been written down for impairment.





F-53





7.
            Convertible
      notes





a.
            Short-term
      convertibles notes


Short
term convertible notes payable as of December 31, 2008 and 2007 consist of the
following:





Description
                  
                  2008
                  
                  
                  2007Convertible
      note payable originating in 2007 with an original principal amount of
      $956,946, unsecured and due on demand, bearing interest at 10% per annum
      (30% per annum if in arrears), convertible at $0.60 into one unit, each
      unit consisting of one share
                  
                  $
                  956,946
                  
                  
                  
                  456,946Less:
      discount attributable to warrants and beneficial conversion
      feature
                  
                  
                  (593,642
                  )
                  
                  
                  (166,240
                  )Add:
      Accretion of discount
                  
                  
                  405,544
                  
                  
                  
                  166,240Carrying
      value of short-term convertible notes
                  
                  $
                  768,848
                  
                  
                  
                  456,946





At
December 31, 2008, Ameriwest accrued $102,870 (2007 - $19,571) of interest in
relation to these notes.


F-54





b.
            Long-term
      convertible notes





Long
convertible notes payable as of December 31, 2008 and December 31, 2007 consist
of the following:





Description
                                      
                                      2008
                                      
                                      
                                      2007Convertible
      notes payable originating in 2008 with original principal amounts
      totalling $2,210,000, unsecured and due in two years, bearing interest at
      6% per annum payable annually, convertible at a rate of $0.60 per share
      into common stock.  Ameriwest also issued warrants to purchase
      3,683,333 shares of its common stock in connection with these notes, which
      start to expire in March 2010.  The warrants are exercisable at
      $0.60 for the first year and at $0.90 for the second year.
                                      
                                      $
                                      2,210,000
                                      
                                      
                                      $
                                      500,000Convertible
      note payable originating in 2008 with original principal amount totalling
      $50,000, unsecured and due in two years, bearing interest at 6% per annum
      payable annually, convertible at a rate of $0.15 per share into common
      stock.  Ameriwest also issued warrants to purchase 333,333
      shares of its common stock in connection with this note, which start to
      expire in November 2010.  The warrants are exercisable at $0.30
      for the first year and at $0.45 for the second year.
                                      
                                      
                                      50,000
                                      
                                      
                                      
                                      -Convertible
      note payable originating in 2008 with original principal amount totalling
      $20,000, unsecured and due in two years, bearing interest at 6% per annum
      payable annually, convertible at a rate of $0.10 per share into common
      stock.  Ameriwest also issued warrants to purchase 200,000
      shares of its common stock in connection with this note, which start to
      expire in December 2010.  The warrants are exercisable at $0.30
      for the first year and at $0.45 for the second year.
                                      
                                      
                                      20,000
                                      
                                      
                                      
                                      -Less:
      Discount attributable to warrants and beneficial conversion
      feature
                                      
                                      
                                      (1,643,688
                                      )
                                      
                                      
                                      (500,000
                                      )Add:  Accretion
      of discount
                                      
                                      
                                      256,815
                                      
                                      
                                      
                                      61,650Carrying
      value of long-term convertible notes
                                      
                                      $
                                      893,127
                                      
                                      
                                      $
                                      61,650





During
the quarter ended June 30, 2008, Ameriwest made change in some estimates of
expected weighted average life and volatility to compute the relative fair value
assigned to the beneficial conversion feature of the warrants issued with the
convertible notes.  These changes in estimates, along with the
adoption of the effective interest method over the straight line method to
amortize the discount over the life of the convertible notes resulted in a
reduction of $99,542 in discount charged to interest expense for the previous
periods.  At December 31, 2008, Ameriwest accrued $81,516 (2007 -
$7,397) in interest in relation to these notes.





Ameriwest
evaluated the conversion options and detachable warrants issued or issuable
pursuant to these long term convertible notes, and concluded that they do not
meet the definition of a derivative instrument under SFAS 133 Accounting for Derivative
Instruments and Hedging Activities.


F-55





c.
            Subsequent
      repricing


Subsequent
to December 31, 2008, on January 31, 2009, the Company entered into a series of
agreements whereby various lenders have elected to exchange their existing
promissory notes and all accrued interest for new convertible promissory notes
reflecting a revised conversion price to $0.10 while retaining the original
expiry dates as set in the original convertible notes.





8.
            Asset
      retirement obligation





Ameriwest
estimates its asset retirement obligation for the South Glenrock “C” Field based
on its understanding of the requirements to reclaim the currently disturbed
areas.





The total
undiscounted amount of estimated cash flow required to settle the obligations is
approximately $45,000, which was adjusted for inflation at the rate of 2.88% per
year and then discounted at 10.06%.  To December 31, 2008, Ameriwest
accreted $2,684 of the discount.  These amounts related to asset
retirement obligations are expected to be paid out in 7 years.





The asset
retirement obligation accrual required management to make significant estimates
and assumptions.  Actual results could differ materially from these
estimates.




Asset
                                retirement
                                obligationBalance,
      December 31, 2007
                              
                              $
                              -Asset
      retirement obligation related to South Glenrock C Field
                              
                              
                              30,176Accretion
      of discount
                              
                              
                              2,684Balance,
      December 31, 2008
                              
                              $
                              32,860




Ameriwest
maintains a bond account fund that was established for the purpose of assuring
maintenance and administration of a performance bond which secures certain
plugging and abandonment obligations assumed by Ameriwest in the acquisition of
oil and gas properties in the State of Wyoming.  At December 31, 2008
and 2007, the amount of the bond totaled $100,000 and $nil,
respectively.





8.
            Capital
      stock





a.
            Common
      stock with warrants


On March
19, 2008, Ameriwest sold 666,668 units at a price of $0.60 per unit, for net
proceeds of $400,000.  Each unit consisted of one share of common
stock and one share purchase warrant, with each warrant exercisable at $0.60 for
the first year and at $0.90 for the second year.  Ameriwest incurred
share issue costs of $20,000 associated with this private
financing.  The allocation of proceeds from the sale of the 666,668
capital stock units to the share purchase warrants based on the fair value of
$156,861 was estimated using the Black Scholes stock price valuation model with
the following assumptions: i) expected volatility of 119%; ii) risk free
interest rate of 1.32%; iii) expected weighted average life of 1 year; and iv)
no dividend yield. The relative fair value allocated to the warrants amounted to
$112,675 and the relative fair value assigned to the shares amounted to
$287,325.


F-56





b.
            Warrants
      issued with convertible notes


On March
3, 2008 Ameriwest received convertible loan proceeds of $50,000, and issued
83,334 warrants in connection with this note, expiring March 3, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $50,000
convertible note and corresponding issuance of 83,334 warrants based on the fair
value of $29,007 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 122.57%; ii)
risk free interest rate of 1.74%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $18,957 and the relative fair value assigned to the
beneficial conversion feature amounted to $31,043.





On March
10, 2008 Ameriwest received convertible loan proceeds of $150,000, and issued
250,000 warrants in connection with this note, expiring March 10, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $150,000
convertible note and corresponding issuance of 250,000 warrants based on the
fair value of $94,956 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
122.57%; ii) risk free interest rate of 1.46%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $57,559 and the relative fair value
assigned to the beneficial conversion feature amounted to $92,441.





On March
17, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring March 17, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667 warrants based on the
fair value of $53,868 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
122.57%; ii) risk free interest rate of 1.32%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $37,442 and the relative fair value
assigned to the beneficial conversion feature amounted to $62,558.





On March
25, 2008 Ameriwest received convertible loan proceeds of $250,000, and issued
416,667 warrants in connection with this note, expiring March 25, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $250,000
convertible note and corresponding issuance of 416,667 warrants based on the
fair value of $138,268 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
122.57%; ii) risk free interest rate of 1.64%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $94,077 and the relative fair value
assigned to the beneficial conversion feature amounted to $155,923.





On April
15, 2008 Ameriwest received convertible loan proceeds of $300,000, and issued
500,000 warrants in connection with this note, expiring April 15, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $300,000
convertible note and corresponding issuance of 500,000 warrants based on the
fair value of $194,067 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
129.54%; ii) risk free interest rate of 1.84%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $117,838 and the relative fair value
assigned to the beneficial conversion feature amounted to $182,162.





On May
12, 2008 Ameriwest received convertible loan proceeds of $300,000, and issued
500,000 warrants in connection with this note, expiring May 12, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $300,000
convertible note and corresponding issuance of 500,000 warrants based on the
fair value of $174,040 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
129.54%; ii) risk free interest rate of 2.30%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $116,275 and the relative fair value
assigned to the beneficial conversion feature amounted to
$183,725.


F-57





On May
15, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring May 15, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667 warrants based on the
fair value of $59,422 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
129.54%; ii) risk free interest rate of 2.45%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $38,900 and the relative fair value
assigned to the beneficial conversion feature amounted to $61,100.





On June
2, 2008 Ameriwest received convertible loan proceeds of $400,000, and issued
666,667 warrants in connection with this note, expiring June 2, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $400,000
convertible note and corresponding issuance of 666,667warrants based on the fair
value of $276,313 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 129.54%; ii)
risk free interest rate of 2.51%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $158,729 and the relative fair value assigned to the
beneficial conversion feature amounted to $241,271.





On July
16, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring July 16, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667warrants based on the fair
value of $64,845 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 150.56%; ii)
risk free interest rate of 2.44%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $41,431 and the relative fair value assigned to the
beneficial conversion feature amounted to $58,569.





On July
25, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring July 25, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667warrants based on the fair
value of $56,446 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 150.56%; ii)
risk free interest rate of 2.70%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $40,870 and the relative fair value assigned to the
beneficial conversion feature amounted to $59,130.





On August
12, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring August 12, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667warrants based on the fair
value of $57,787 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 150.56%; ii)
risk free interest rate of 2.45%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $40,949 and the relative fair value assigned to the
beneficial conversion feature amounted to $59,051.





On August
13, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring August 13, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667warrants based on the fair
value of $57,800 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 150.56%; ii)
risk free interest rate of 2.50%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $40,954 and the relative fair value assigned to the
beneficial conversion feature amounted to $59,046.


F-58


On August
18, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued
166,667 warrants in connection with this note, expiring August 18, 2010. The
warrants are exercisable at $0.60 for the first year and at $0.90 for the second
year.  The allocation of proceeds from the sale of the $100,000
convertible note and corresponding issuance of 166,667warrants based on the fair
value of $50,800 was estimated using the Black Scholes stock price valuation
model with the following assumptions: i) expected volatility of 150.56%; ii)
risk free interest rate of 2.35%; iii) expected weighted average life of 2
years; and iv) no dividend yield.  The relative fair value allocated
to the warrants amounted to $40,381 and the relative fair value assigned to the
beneficial conversion feature amounted to $59,619.





On
October 16, 2008 Ameriwest received convertible loan proceeds of $60,000, and
issued 100,000 warrants in connection with this note, expiring October 16, 2010.
The warrants are exercisable at $0.60 for the first year and at $0.90 for the
second year.  The allocation of proceeds from the sale of the $60,000
convertible note and corresponding issuance of 100,000 warrants based on the
fair value of $14,098 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
178.27%; ii) risk free interest rate of 1.61%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $24,101 and the relative fair value
assigned to the beneficial conversion feature amounted to $35,899.





On
November 10, 2008 Ameriwest received convertible loan proceeds of $50,000, and
issued 333,333 warrants in connection with this note, expiring November 10,
2010. The warrants are exercisable at $0.30 for the first year and at $0.45 for
the second year.  The allocation of proceeds from the sale of the
$50,000 convertible note and corresponding issuance of 333,333 warrants based on
the fair value of $41,459 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
178.27%; ii) risk free interest rate of 1.27%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $21,125 and the relative fair value
assigned to the beneficial conversion feature amounted to $28,875.





On
December 27, 2008 Ameriwest received convertible loan proceeds of $20,000, and
issued 200,000 warrants in connection with this note, expiring December 27,
2010. The warrants are exercisable at $0.30 for the first year and at $0.45 for
the second year.  The allocation of proceeds from the sale of the
$20,000 convertible note and corresponding issuance of 200,000 warrants based on
the fair value of $8,743 was estimated using the Black Scholes stock price
valuation model with the following assumptions: i) expected volatility of
178.27%; ii) risk free interest rate of 0.89%; iii) expected weighted average
life of 2 years; and iv) no dividend yield.  The relative fair value
allocated to the warrants amounted to $7,621 and the relative fair value
assigned to the beneficial conversion feature amounted to $12,379.




F-59


At
December 31, 2008, 6,800,006 warrants were outstanding, as follows:





#ofWarrants
                                                                  Issued
                                                                
                                                                Expiry
                                                                
                                                                Exercise
                                                                  Price
                                                                
                                                                
                                                                Number
                                                                  Outstandingas
                                                                  atDecember
                                                                  31,2008
                                                                
                                                                
                                                                Weighted
                                                                  Average
                                                                  Remaining
                                                                  Contractual
                                                                  Life
                                                                
                                                                
                                                                Weighted
                                                                  Average
                                                                  Exercise
                                                                  Price
                                                                
                                                                
                                                                #of
                                                                  Warrants
                                                                  Issued
                                                                
                                                                
                                                                Exercise
                                                                  Price
                                                                
                                                                ExpiryIssued,
      October 2, 2007
                                                                
                                                                
                                                                833,333
                                                                
                                                                2-Oct-09
                                                                
                                                                $
                                                                0.90
                                                                
                                                                
                                                                
                                                                833,333
                                                                
                                                                
                                                                
                                                                0.09
                                                                
                                                                
                                                                $
                                                                0.90Issued,
      October 7, 2007
                                                                
                                                                
                                                                1,083,334
                                                                
                                                                7-Oct-09
                                                                
                                                                $
                                                                0.90
                                                                
                                                                
                                                                
                                                                1,083,334
                                                                
                                                                
                                                                
                                                                0.12
                                                                
                                                                
                                                                $
                                                                0.90Balance,
      December 31, 2007
                                                                
                                                                
                                                                1,916,667
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                1,916,667
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                -Issued,
      March 3, 2008
                                                                
                                                                
                                                                83,334
                                                                
                                                                3-Mar-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                83,334
                                                                
                                                                
                                                                
                                                                0.00
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                83,334
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                3-Mar-10Issued,
      March 10, 2008
                                                                
                                                                
                                                                250,000
                                                                
                                                                10-Mar-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                250,000
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                250,000
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                10-Mar-10Issued,
      March 17, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                17-Mar-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                17-Mar-10Issued,
      March 19, 2008
                                                                
                                                                
                                                                666,668
                                                                
                                                                19-Mar-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                666,668
                                                                
                                                                
                                                                
                                                                0.02
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                666,668
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                19-Mar-10Issued,
      March 25, 2008
                                                                
                                                                
                                                                416,667
                                                                
                                                                25-Mar-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                416,667
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                416,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                25-Mar-10Issued,
      April 15, 2008
                                                                
                                                                
                                                                500,000
                                                                
                                                                15-Apr-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                500,000
                                                                
                                                                
                                                                
                                                                0.02
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                500,000
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                15-Apr-10Issued,
      May 12, 2008
                                                                
                                                                
                                                                500,000
                                                                
                                                                12-May-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                500,000
                                                                
                                                                
                                                                
                                                                0.03
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                500,000
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                12-May-10Issued,
      May 15, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                15-May-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                15-May-10Issued,
      June 2, 2008
                                                                
                                                                
                                                                666,667
                                                                
                                                                2-Jun-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                666,667
                                                                
                                                                
                                                                
                                                                0.04
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                666,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                2-Jun-10Issued,
      July 16, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                16-Jul-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                16-Jul-10Issued,
      July 25, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                25-Jul-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                25-Jul-10Issued,
      August 12, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                12-Aug-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.02
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                12-Aug-10Issued,
      August 13, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                13-Aug-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.02
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                13-Aug-10Issued,
      August 18, 2008
                                                                
                                                                
                                                                166,667
                                                                
                                                                18-Aug-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                
                                                                0.02
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                166,667
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                18-Aug-10Issued,
      October 16, 2008
                                                                
                                                                
                                                                100,000
                                                                
                                                                16-Oct-09
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                100,000
                                                                
                                                                
                                                                
                                                                0.01
                                                                
                                                                
                                                                $
                                                                0.60
                                                                
                                                                
                                                                
                                                                100,000
                                                                
                                                                
                                                                $
                                                                0.90
                                                                
                                                                16-Oct-10Issued,
      November 10, 2008
                                                                
                                                                
                                                                333,333
                                                                
                                                                10-Nov-09
                                                                
                                                                $
                                                                0.30
                                                                
                                                                
                                                                
                                                                333,333
                                                                
                                                                
                                                                
                                                                0.04
                                                                
                                                                
                                                                $
                                                                0.30
                                                                
                                                                
                                                                
                                                                333,333
                                                                
                                                                
                                                                $
                                                                0.45
                                                                
                                                                10-Nov-10Issued,
      December 27, 2008
                                                                
                                                                
                                                                200,000
                                                                
                                                                27-Dec-09
                                                                
                                                                $
                                                                0.30
                                                                
                                                                
                                                                
                                                                200,000
                                                                
                                                                
                                                                
                                                                0.03
                                                                
                                                                
                                                                $
                                                                0.30
                                                                
                                                                
                                                                
                                                                200,000
                                                                
                                                                
                                                                $
                                                                0.45
                                                                
                                                                27-Dec-10Balance,
      December 31, 2008
                                                                
                                                                
                                                                6,800,006
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                6,800,006




c.
              Net  loss  per  common  share


Basic net
loss per common share is calculated by dividing the net loss applicable to
common shares by the weighted- average number of common and common equivalent
shares outstanding during the period. For the fiscal year ended December 31,
2008 and 2007, there were no potential common equivalent shares used in the
calculation of weighted-average common shares outstanding as the effect would be
anti-dilutive because of the net loss. The amounts of common equivalent shares
outstanding at each period end are as follows:





December31,2008
                    
                    
                    December31,2007Securities
      convertible into shares of common stock, not used because the effect would
      be anti-dilutive:Stock
      warrants related to private equity placements
                    
                    
                    1,750,002
                    
                    
                    
                    -Stock
      warrants related to convertible notes placements
                    
                    
                    5,050,004
                    
                    
                    
                    -Common
      stock issuable upon conversion of convertible notes
                    
                    
                    2,349,692
                    
                    
                    
                    1,639,857Stock
      warrants related to conversion of convertible notes
    placements
                    
                    
                    851,365
                    
                    
                    
                    794,19510,001,062
                    
                    
                    
                    2,434,052


F-60





d.
              Stock
      based compensation


On
September 24, 2008, Ameriwest granted 500,000 options to an officer of the
company.  The options are exercisable at $0.38 until September 24,
2018, and vest equally over a period of three years, with the first third
vesting upon grant.





On
September 24, 2008, Ameriwest granted 250,000 options to an employee of the
company.  The options are exercisable at $0.38 until September 24,
2018, and vest equally over a period of two years, with the first half vesting
upon grant.





The fair
value of the options was estimated at $288,378 using the Black Scholes stock
price valuation model with the following assumptions: i) expected volatility of
151%; ii) risk free interest rate of 3.8%; iii) expected option term 5 years
calculated pursuant to the terms of SAB 107 as the option grants qualify as
“plain vanilla” under that literature; and iv) no dividend yield and no
forfeitures.  As at December 31, 2008, Ameriwest has recorded $112,147
in stock based compensation in relation to these options, and another $176,231
will be charged to the statement of operations as the options vest.





# of Options
                          Issued
                        
                        Expiry
                        
                        Exercise
                          Price
                        
                        
                        Vested
                        
                        
                        Number
                          Outstanding as
                          at December 31,
                          2008
                        
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                          Life
                        
                        
                        Weighted
                          Average
                          Exercise
                          PriceBalance,
      December 31, 2007
                        
                        
                        -
                        
                        
                        
                        
                        
                        
                        
                        -
                        
                        
                        
                        -Issued,
      September 24, 2008
                        
                        
                        250,000
                        
                        24-Sep-18
                        
                        $
                        0.38
                        
                        
                        
                        125,000
                        
                        
                        
                        125,000
                        
                        
                        
                        4.17
                        
                        
                        $
                        0.38Issued,
      September 24, 2008
                        
                        
                        500,000
                        
                        24-Sep-18
                        
                        $
                        0.38
                        
                        
                        
                        166,667
                        
                        
                        
                        166,667
                        
                        
                        
                        5.56
                        
                        
                        $
                        0.38Balance,
      December 31, 2008
                        
                        
                        750,000
                        
                        
                        
                        
                        
                        
                        
                        
                        291,667
                        
                        
                        
                        291,667





9.
            Related
      party transactions





a.
            Pursuant
      to a management services agreement, Ameriwest paid $7,500 to a former
      officer and director during the fiscal year ended December 31,
      2008.  This agreement was terminated in February
      2008;





b.
            Pursuant
      to a month-to-month verbal agreement, Ameriwest incurred $77,500 in
      management fees to an officer and director.  This amount was due
      at December 31, 2008, and is included in due to related parties on the
      balance sheet;





c.
            Pursuant
      to a month-to-month verbal agreement, Ameriwest incurred $47,500 in
      management fees to a director.  This amount was due at December
      31, 2008 and is included in due to related parties on the balance
      sheet;





d.
            Pursuant
      to an employment agreement effective June 5, 2008, Ameriwest incurred
      $50,625 in executive compensation to an officer.  Of this
      amount, $3,750 was due at December 31, 2008 and is included in due to
      related parties on the balance
sheet;





e.
            On
      March 19, 2008, Ameriwest signed a letter of intent with Hot Springs
      Resources, Ltd., a company whose assets are partially owned by Ameriwest’s
      President and a director;





f.
            On
      April 15, 2008 and as amended on June 25, 2008, Ameriwest signed an
      exclusive option to purchase assets with Alpha Development Corporation and
      JK Minerals, Inc.  Such assets are partially owned by one of
      Ameriwest’s directors;


F-61





g.
            Effective
      May 1, 2008, Ameriwest entered into an assignment of revenues agreement
      with Muddy Mineral Exploration LLC, a company whose assets are partially
      owned by Ameriwest’s President and a director.  Pursuant to this
      agreement, Ameriwest has accrued $48,972 due to Muddy for oil in tank at
      May 1, 2008.  This amount is included in due to related parties
      on the balance sheet at December 31, 2008, in addition to $200,000 that
      has been accrued for extension
fees;





h.
            On
      May 30, 2008 Ameriwest signed a Purchase and Sale Agreement with Geochem
      Exploration, LLC, a company solely owned by Ameriwest’s
      President.





10.
            Income
      taxes





Deferred
income taxes reflect the net effect of temporary difference between
carrying  amounts of assets and
liabilities  for  financial  purposes  and  the  amounts  used  for
income taxes reporting  purposes,  and net operating loss
carryforwards.





No net
provision for refundable U.S.  Federal income tax has been made in the
accompanying statement of operations because no recoverable taxes were paid
previously. Similarly, no  deferred  tax  asset
attributable to the net operating loss carryforward has
been  recognized,  as  it  is  not  deemed  likely  to  be  realized.





At
December 31, 2008, Ameriwest has accumulated net operating losses in the United
States totaling approximately $5,012,000 (2007 - $974,000) which are available
to reduce taxable income in future years and begin to expire in
2026.





The
significant components of Ameriwest’s deferred tax assets as of December 31,
2008 and 2007 are as follows:




2008
              
              
              2007Deferred
      tax assetsNet
      operating loss carry forward
              
              $
              2,035,500
              
              
              $
              341,000Less:
      valuation allowance
              
              
              (2,035,500
              )
              
              
              (341,000
              )$
              -
              
              
              $
              -




11.
            Commitments





a.
            On
      June 15, 2007, Ameriwest entered into a one year contract for marketing
      and communications consulting services.  In consideration, the
      Company paid a monthly retainer of $5,000.  This commitment was
      terminated in January 2008;





b.
            On
      June 15, 2007, Ameriwest entered into a contract for investor relations
      services requiring the payment of $10,000 per month, expiring on June 14,
      2009.  This commitment can be terminated by either party with 90
      days’ written notice;





c.
            Effective
      March 1, 2008, Ameriwest entered into a month-to-month lease agreement for
      office space, for monthly fees of
$700.


F-62





12.
            Legal
      Proceedings





On or
about September 28, 2007, Ameriwest filed a complaint in the Second Judicial
District Court of the State of Nevada against Penson Financial Services Canada,
PI Financial Corporation, Haywood Securities, Inc., Raymond James, Inc.,
Westminster Securities Corporation, Pershing LLC, Merrill Lynch & Co., Inc.,
The Hill Thompson Group, Ltd., Private Equity Securities, Inc., Brokington
Securities, Inc., Fordham Financial Management, Inc., Legent Clearing, LLC,
First Clearing, LLC, The Depository Trust Company (“DTC”) and National
Securities Clearing Corporation (“NSCC”) for declaratory and injunctive
relief.  On or about May 4, 2007, Ameriwest announced a 3.6 to 1
forward stock split for stockholders of record and on May 14, 2007, Ameriwest’s
transfer agent filed a verification form with NASDAQ verifying the stock split
and issued post-split stock certificates.  On or about June 12, 2007,
Ameriwest amended its Articles of Incorporation changing its name from “Henley
Ventures, Inc.” to “South Sea Energy Corporation.”  On June 29, 2007
NASDAQ announced a 3.6 to 1 forward stock split for Ameriwest’s shares with a
record date of July 2, 2007 along with the name change.  As a result
of such announcement and despite the stock split already having occurred prior
to such announcement by NASDAQ, DTC and/or NSCC made the announcement of the
stock split to First Clearing and Legent. First Clearing and Legent then forward
split Ameriwest’s shares again 3.6 to 1 which resulted in overdeliveries of
Ameriwest’s shares to various purchasers.  Ameriwest has knowledge and
believe that over 90% of the overdelivered shares are being held by various
purchasers in their unclaimed suspense accounts.  Ameriwest filed an
action for declaratory and injunctive relief to cause the overdelivered shares
to be returned to their rightful owners, and for all relevant parties to correct
their respective ledger accounts.




On April
16, 2008, Ameriwest entered into a settlement agreement with First Clearing,
LLC, Fordham Financial Management, Inc., Penson Financial Services Canada and
Penson Financial Services, Inc. whereby Penson Financial Services Canada agreed
to deliver 221,000 overdelivered shares to Fordham Financial Management,
Inc.  Additionally, Ameriwest dismissed all remaining parties from the
lawsuit.




13.
              Subsequent
      Events


Subsequent
to our fiscal year ended December 31, 2008, on February 25, 2009, we entered
into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation
(“Wold”) where we have the right to earn up to a 100% ownership interest in oil
and gas leasehold rights to approximately 320 net acres within certain land
located in Natrona and Converse counties, Wyoming. We agreed to commence
drilling of a test well within such lands on or before August 1, 2009. After we
have drilled an initial test well to the contract depth of 8,000 feet, Wold will
assign and convey to us, 100% of its interest in the drillsite spacing unit and
participating area, and 65% of its operating rights in the one-half block of the
land where the test well was drilled. We will operate the actual
 well
drilled and receive a 80% Net Revenue Interest.
 
 Subsequent
to our fiscal year ended December 31, 2008, on March 30, 2009, we entered into
an Agreement to Operate South Glenrock Block “C” And Extension of Purchase
Agreement with Muddy. Under the agreement, both Muddy and we agreed to (i)
extend the closing date to June 1, 2009, (ii) reduce the purchase price to
$4,000,000, (iii) confirm that the amount of $1,750,000 we previously paid
towards the purchase price is non-refundable, (iv) confirm that we shall operate
and manage South Glenrock oilfield until the closing date or upon termination of
the agreement and entitled to all revenue generated from such oilfield, and (v)
assign all our interest in South Glenrock “C” upon termination of the
agreement.




F-63