**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM 10-K/A**


**(Amendment
        No. 1)**




**(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, 2007**




**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 1****st****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****x**
            
            **NO****o**


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**o**Non-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 December 31, 2008 was $24,134,574.




As
      of
      April 14, 2008, there were 54,278,002 shares of common stock outstanding.
      (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.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





Exhibits
      incorporated by reference are referred under Part IV.





**Explanatory
      Note**





We
        are
        filing this Form 10-K/A to reflect corrections in the 10-K Original Filing
        filed
        with the Securities and Exchange Commission on April 15, 2008 in response
        to a
        comment letter received from the Commission on July 28, 2008. We are making
        revisions to the following sections: “Front Cover Page,” “Description of
        Business,” “Management’s Discussion and Analysis of Financial Conditions and
        Plan of Operation,” “Controls and Procedures” and “Financial
        Statements.”







**TABLE
      OF CONTENTS**





PagePART
                  1ITEM
                  1.
              DESCRIPTION
                  OF BUSINESS
              4ITEM
                  1A.
              RISK
                  FACTORS
              5ITEM
                  1B.
              UNRESOLVED
                  STAFF COMMENTS
              9ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
              9ITEM
                  3.
              LEGAL
                  PROCEEDINGS
              9ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO VOTE OF SECURITIES HOLDERS
              9PART
                  IIITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              10ITEM
                  6.
              SELECTED
                  FINANCIAL DATA
              10ITEM
                  7.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
              10ITEM
                  7A.
              QUANTITATIVE
                  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
              19ITEM
                  8.
              FINANCIAL
                  STATEMENTS AND SUPPLEMENTARY DATA
              19ITEM
                  9.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
              19ITEM
                  9A.
              CONTROLS
                  AND PROCEDURES
              20ITEM
                  9B.
              OTHER
                  INFORMATION
              21PART
                  IIIITEM
                  10.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS, COMPLIANCE
                  WITH
                  SECTION 16 (a) OF THE EXCHANGE ACT
              23ITEM
                  11.
              EXECUTIVE
                  COMPENSATION
              24ITEM
                  12.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDERS MATTERS
              26ITEM
                  13.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS
              27ITEM
                  14.
              PRINCIPAL
                  ACCOUNTANTS FEES AND SERVICES
              27PART
                  IVITEM
                  15.
              EXHIBITS
                  AND REPORTS ON FORM 8-K
              29SIGNATURES
              30




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 a 99.5% working interest in 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, on August 28, 2007, we merged with
      and
      into our wholly owned subsidiary, Ameriwest Energy Corp. (“Ameriwest”) resulting
      in Ameriwest Energy Corp. being the surviving corporation.




On
      November 6, 2007, we signed a Letter of Intent with Geochem Exploration, LLC,
      a
      Wyoming limited liability company (“Geochem”) to acquire the right to purchase
      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.




**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.




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.


4




Other
      than completing our current acquisition transactions, we do not anticipate
      making any major purchases of capital assets in the next 6 months. We believe
      that, with our current efforts to raise capital, we will 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, 2007, we had no full time employees. We currently utilize temporary
      contract labor throughout the year to address business and administrative needs.




**ITEM
      1A. RISK FACTORS**




**RISKS
      RELATED TO OUR BUSINESS**




*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."*




***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 a successful reorganization or acquisition of an
      existing business. 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 development
      stage and potential investors should be aware of the difficulties normally
      encountered by enterprises in the development stage. 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 $974,452 for the period from January 3, 2001 (inception)
      to December 31, 2007. 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.


5




***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 initiate our oil and gas exploration 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.




***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.




***Even
      if we are able to, the potential profitability of oil and gas ventures depends
      upon factors beyond the control of our company.*** **




The
      potential profitability of oil and gas properties is dependent upon many factors
      beyond our control. For instance, world prices and markets for gas and minerals
      are unpredictable, highly volatile, potentially subject to governmental fixing,
      pegging, controls or any combination of these and other factors, and respond to changes in domestic,
      international, political, social and economic environments. Additionally, due
      to
      worldwide economic uncertainty, the availability and cost of funds for
      production and other expenses have become increasingly difficult, if not
      impossible, to project. These changes and events may materially affect our
      future financial performance. These factors cannot be accurately predicted
      and
      the combination of these factors may result in our company not receiving an
      adequate return on invested capital.




***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, and mineral 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.


6




***The
      marketability of natural resources will be affected by numerous factors beyond
      our control which may result in us not receiving an adequate return on invested
      capital to be profitable or viable*** ** ***.*** **




The
      marketability of natural resources which may be acquired or discovered by us
      will be affected by numerous factors beyond our control. These factors include
      market fluctuations in pricing and demand, the proximity and capacity of natural
      resource markets and processing equipment, governmental regulations, land
      tenure, land use, regulation concerning the importing and exporting of gas
      and
      environmental protection regulations. The exact effect of these factors cannot
      be accurately predicted, but the combination of these factors may result in
      us
      not receiving an adequate return on invested capital to be profitable or viable.




***Exploration
      and production activities are subject to certain environmental regulations
      which
      may prevent or delay the commencement or continuation of our
      operations.*** **




In
      general, our exploration and future production activities are subject to certain
      country-specific federal, state and local laws and regulations relating to
      environmental quality and pollution control. Such laws and regulations increase
      the costs of these activities and may prevent or delay the commencement or
      continuation of a given operation. Compliance with these laws and regulations
      has not had a material effect on our operations or financial condition to date.
      Specifically, we are subject to legislation regarding emissions into the
      environment, water discharges and storage and disposition of hazardous wastes.
      Generally, environmental requirements do not appear to affect us any differently
      or to any greater or lesser extent than other companies in the industry. We
      believe that our current operations comply, in all material respects, with
      all
      applicable environmental regulations.




***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 does this, it 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 will be
      required to include management's report on internal controls as part of our
      annual report for the fiscal year ending December 31, 2007 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, 2008. We are in the process of evaluating our
      control structure to help ensure that we will be able to comply with Section
      404
      of the Sarbanes-Oxley Act. The financial cost of compliance with these laws,
      rules and regulations is expected to be 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.




***We
      are currently a shell company with limited operations and no
      revenues.***




There
      can
      be no assurance that we will be able to acquire an operating company or
      business. Further, if we are able to acquire an operating company or business,
      there is no assurance that we will be able to operate
      profitably.


7




Although
      there are many companies that are looking to become public through a reverse
      acquisition / shell merger, there is competition for attractive acquisition
      candidates and there can be no assurance that we will be able to find a suitable
      candidate.




***There
      is uncertainty as to our ability to enforce civil liabilities both in and
      outside the United States due to the fact that some of our directors and all
      of
      our assets are not located in the United States.***




Our
      office, our mining interests, and the majority of our assets are located in
      Canada or outside of the United States. Our current, limited operations are
      conducted in Canada. Some of our directors reside in Canada. As a result, it
      may
      be difficult for shareholders to effect service of process within the United
      States on our officers and directors. In addition, investors may have difficulty
      enforcing judgments based upon the civil liability provisions of the securities
      laws of the United States or any state thereof, both in and outside of the
      United States.




***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 the date of this Report,
      we
      have 54,278,002 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.




***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 OTBB 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.




8


**ITEM
      1B. UNRESOLVED STAFF COMMENTS**




**None**





**ITEM
      2. PROPERTIES**




After
      our
      fiscal year ended 2007, in March 2008, we moved our offices to 123 West
      1 st Ave.,
      Suite 215, Casper, Wyoming. The Company leases office space on a month-to-month
      basis, for monthly costs of $700.





**ITEM
      3. LEGAL PROCEEDINGS**




On
      or
      about September 28, 2007, we 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.
      In January 2008, we amended the complaint to add Penson Financial Services,
      Inc.
      as an additional party. On or about May 4, 2007, we announced a 3.6 to 1 forward
      stock split for stockholders of record and on May 14, 2007, our transfer agent
      filed a verification form with NASDAQ verifying the stock split and issued
      post-split stock certificates. On or about June 12, 2007, we amended our
      Articles of Incorporation changing our 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 our shares with a record date of July 2, 2007 along
      with
      the name change. As a result of such announcement and despite our 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 our shares again 3.6 to 1 which resulted
      in overdeliveries of our shares to various purchasers. We have knowledge and
      believe that over 90% of the overdelivered shares are being held by various
      purchasers in their unclaimed suspense accounts. We filed this 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.




Subsequent
      to our fiscal year ended 2007, on January 14, 2008, we entered into a settlement
      agreement with PI Financial Corporation whereby PI Financial Corporation agreed
      to deliver 52,000 overdelivered shares to Weintraub Genshlea Chediak to be
      held
      in trust until the legal owner of such shares is determined. On January 24,
      2008, we entered into a settlement agreement with Penson Financial Services
      Canada and Brockington Securities, Inc. whereby Penson Financial Services Canada
      agreed to deliver 507,000 overdelivered shares to Brockington Securities, Inc.
      Additionally, on January 24, 2008, we entered into a settlement agreement with
      Penson Financial Services Canada and Private Equity Securities, Inc. whereby
      Penson Financial Services Canada agreed to deliver 468,000 overdelivered shares
      to Brockington Securities, Inc. Finally, on February 13, 2008, Haywood
      Securities, Inc. delivered 295,100 overdelivered shares to Fordham Financial
      Management, Inc.




As
      of
      March 25, 2008, we have dismissed the following parties from this lawsuit:
      PI
      Financial Corporation, Haywood Securities, Inc., Raymond James, Inc.,
      Westminster Securities Corporation, Pershing LLC, Merrill Lynch & Co., Inc.,
      Private Equity Securities, Inc., Brokington Securities, Inc., Legent Clearing,
      LLC, DTC and NSCC.




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




There
      has
      been no Annual General Meeting of Stockholders within the last fiscal year
      and
      there has been none held since the date of inception.


9


**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
                2007***
            
            **High**
            
            **Low**First
                Quarter (March 6-March 31, 2007)
            
            $
            .13889
            
            $
            .13889Second
                Quarter (June 30, 2007)
            
            $
            .85
            
            $
            .13889Third
                Quarter (September 30, 2007)
            
            $
            .95
            
            $
            .70Fourth
                Quarter (December 31, 2007)
            
            $
            1.01
            
            $
            .57





The
      closing price for our common stock on December 31, 2007 was $0.56.





**Stockholders**





As
      of
      April 14, 2008, there were 54,278,002 shares of common stock issued and
      outstanding held by 19 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**





None.




**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.


10




The
      discussion and financial statements contained herein are for our fiscal year
      ended December 31, 2007 and December 31, 2006. The following discussion
      regarding our financial statements should be read in conjunction with our
      financial statements included herewith.




**Financial
      Condition as of December 31, 2007.**




We
      reported total current assets of $10,600 at December 31, 2007, consisting of
      cash of $245 and prepaid expenses and deposits of $10,355. Total current
      liabilities reported of $1,237,554 consisted of $753,640 in accounts payable
      and
      accrued liabilities and of $483,914 in convertible notes and interest on
      convertible notes. We had a working capital deficiency of $1,226,954 at December
      31, 2007. We had long term liabilities of $61,560, representing the amortized
      value of the detachable warrants issued in connection with the October 2, 2007
      convertible notes.




Stockholders'
      Deficiency decreased from $60,914 at December 31, 2006 to an equity position
      of
      $470,139 at December 31, 2007. This change is due to a net loss of $815,351
      in
      the period, subscriptions received and the issuance of notes convertible into
      units of common stock.




We
      are
      currently a development stage company focused on the gas and mineral industry,
      and evaluating opportunities for expansion within that industry through
      acquisition or other strategic relationships.




**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. 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 a 99.5% working interest in 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, on August 28, 2007, we merged with
      and
      into our wholly owned subsidiary, Ameriwest Energy Corp. (“Ameriwest”) resulting
      in Ameriwest Energy Corp. being the surviving corporation.




11




On
      November 6, 2007, we signed a Letter of Intent with Geochem Exploration, LLC,
      a
      Wyoming limited liability company (“Geochem”) to acquire the right to purchase
      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.




**Subsequent
      Events**




Subsequent
      to our fiscal year ended December 31, 2007, we entered into an amendment
      agreement with Muddy whereby certain of our payment obligations were extended,
      including the final payment to Muddy of $3,250,000 to on or before June 1,
      2008.
      Additionally, the parties agreed to extend the entering of a definitive
      agreement to on or before May 1, 2008.




Further
      subsequent to our fiscal year ended December 31, 2007, we entered into an
      amendment agreement with Geochem whereby certain of our payment obligations
      were
      extended, including the final payment to Geochem of $200,000 to on or before
      May
      15, 2008. Additionally, the parties agreed to extend the entering of a
      definitive agreement to on or before May 15, 2008.




Further
      subsequent to our fiscal year ended December 31, 2007, 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.




**Cash
      and Cash Equivalents**




As
      of
      December 31, 2007, we had cash of $245. 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.




**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.




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.




Other
      than completing our current acquisition transaction, we do not anticipate making
      any major purchases of capital assets in the next 6 months. We believe that,
      with our current efforts to raise capital, we will 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.




**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.




12




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, 2007. 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.




*Exploration
      Stage*




We
      comply
      with Financial Accounting Standard Board Statement (“SFAS”) No. 7 for its
      characterization of us as an exploration Stage Company. We are devoting
      substantially all of our present efforts to establish a new business and none
      of
      its planned principal operations have commenced.




*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 the Statement of Financial Accounting Standards
        No. 69.
        Under this method of accounting, the costs of unsuccessful, as well as
        successful, exploration and development activities are capitalized as properties
        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.


13


**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 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, 2007, we have capitalized $nil in oil and gas
        properties, which is subject to the ceiling test for impairment.




*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. We recognize 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 we utilize, is excluded from this
      requirement, but will continue to be subject to the ceiling test
      limitations.




*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
      we
      issue convertible instruments with detachable instruments, the proceeds of
      the
      issuance are allocated between the convertible instrument and other detachable
      instruments based on their relative fair values pursuant to Emerging Issues
      Task
      Force (“EITF”) Issue No. 00-27 “Application of Issue No. 98-5 to Certain
      Convertible Instruments”. The resulting discount of the convertible instrument
      is amortized into income as interest expense over the term of the convertible
      instrument.




When
      we
      issue convertible debt securities with a non-detachable conversion feature
      that
      provides for an effective rate of conversion that is below market value on
      the
      commitment date, it is known as a beneficial conversion feature (“BCF”) and
      pursuant to EITF Issue No. 98-5 “Accounting for Convertible Securities with
      Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” and
      EITF Issue No. 00-27, the conversion feature of the security that has
      characteristics of an equity instrument is measured at its intrinsic value
      at
      the commitment date and is recorded as additional paid in capital. A portion
      of
      the proceeds of the security issued is allocated to the conversion feature
      equal
      to its intrinsic value to a maximum of the amount allocated to the convertible
      instrument. The resulting discount of the debt instrument is amortized into
      income as interest expense over the conversion feature’s vesting period.


14




*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.




**Results
      of Operations**




**For
      the Fiscal Year Ended December 31, 2007**




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. Due to the
      significant changes, part of our results for the year ended December 31, 2006
      and 2005 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, 2007 and 2006 should not be relied on as an indication of
      future performance.


Year Ended
                December 31,
                2007
              
              Year Ended
                December 31,
                2006**Expenses**Acquisition
                  costs written off
              
              $
              183,230
              
              $
              5,770Contribution
                  rent and services
              
              
              7,184
              
              
              14,123Executive
                  compensation
              
              
              49,214
              
              
              -Interest
              
              
              254,768
              
              
              -Marketing
                  and investor relations
              
              
              148,276
              
              
              -Professional
                  fees
              
              
              135,890
              
              
              13,344Other,
                  general and administrative
              
              
              36,789
              
              
              1,833**Net
                  Loss**
              
              **$**
              **815,351**
              
              **$**
              **35,070**




***General
      and administrative expenses***




During
      the fiscal year ended December 31, 2007, we incurred total expenses of $815,351,
      as compared to $35,070 for the year ended December 31, 2006. 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.




***Acquisition
      costs***




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.





**Period
      from inception, January 3, 2001 to December 31, 2007**





We
      have
      incurred losses in each period since inception and have an accumulated deficit
      of $1,000,452 at December 31, 2007. We expect to continue to incur losses as
      a
      result of expenditures for general and administrative activities while we remain
      in the development stage.


15




**Liquidity
      and Capital Resources**




As
      of
      December 31, 2007, we had cash of $245, and working capital deficiency of
      $1,226,954. During the period ended December 31, 2007, we funded our operations
      from the proceeds of private sales of equity and convertible notes. We are
      currently completing a further financing and we believe that this will 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.




For
      the
      period ended December 31, 2007, we had $348,248 in cash flows provided by
      operating activities. Net cash from operating activities reflected $8,855 in
      prepaid expenses and deposits, a cash overdraft of $68 and an increase in
      accounts payable of $727,340. Investment activities used $1,941,883 in cash
      during the period, of which $1,758,653 was related to the assignment agreement
      with Pin Petroleum Partners Ltd. and the letter of intent with Geochem
      Exploration LLC.




We
      raised
      $956,946 during the fiscal year ended December 31, 2007 from the proceeds of
      convertible notes, $672,980 from the issuance of common stock, and used $36,047
      to refund loans to former related parties.




Our
      current cash requirements are significant due to contemplated acquisition and
      planned exploration and development of this project. Accordingly, we expect
      to
      continue to use cash to fund operations for at least the remaining of our fiscal
      year ended December 31, 2007, as look to expand our asset base and fund
      exploration of our properties.




***Recent
      Financings***




*Convertible
      notes*




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 securities of the Company 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, 2007, we accrued $3,815 in
      interest in relation to the note.




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 securities of the Company 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, 2007, we accrued $8,260 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 securities of the Company 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, 2007, we accrued $4,959 in interest in relation to the note.




An
      amount
      of $68,489 has been 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.


16




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. At
      December 31, 2007, we accrued $1,126 in interest in relation to the
      note.




An
      amount
      of $20,804 has been 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.




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, 2007, we accrued $7,397 in interest in relation to the note. The
      convertible note is presented net of a discount of $438,440 at December 31,
      2007, 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. At December 31, 2007, we accreted $61,560
      of
      the discount 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. At
      December 31, 2007, we accrued $753 in interest in relation to the
      note.




An
      amount
      of $35,113 has been 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.




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. At
      December 31, 2007, we accrued $562 in interest in relation to the note. ,




An
      amount
      of $34,952 has been 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.




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. At
      December 31, 2007, we accrued $96 in interest in relation to the note.
      .


17


An
      amount
      of $6,882 has been 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.




*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, 2007, we issued 26,000,000 to our newly appointed 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.




**Off-Balance
      Sheet Arrangements**




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


18


**Capital
      Expenditures**





We
      did
      not make any capital expenditures in the fiscal year ending December 31, 2007
      other than acquisition costs which have been deferred pending closing on
      property acquisitions totaling $1,758,653.





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





**Payments
                Due by Period****Contract Obligations**
              **At December 31, 2007**
            
            **Total**
            
            **Less than**
              **1 Year**
            
            **1-3 years**
            
            **3-5 years**
            
            **More than**
              **5 years**Total Debt
            
            $
            956,946
            
            $
            456,946
            
            $
            500,000
            
            $
            
            
            $
            —





The
      above
      table outlines our obligations as of December 31, 2007 and does not reflect
      any
      changes in our obligations that have occurred after that date.





**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**




Effective
      December 6, 2007, the Company dismissed Cordovano and Honeck, LLP, of Englewood,
      Colorado, (“the “Former Accountant”) as its independent registered public
      accounting firm.





The
      Company has engaged Malone & Bailey, PC Certified Public Accountants of
      Houston, Texas as the Company’s principal accountant. The change in certifying
      accountant is effective on December 6, 2007. Malone & Bailey have been
      engaged to audit the Company’s year end financial statements for the fiscal year
      ending December 31, 2007.





Save
      and
      except as disclosed below, the Former Accountant did not, for either of the
      past
      two years or to the date of the change of certifying accountant, produce a
      report on the financial statements of the Company which contained an adverse
      opinion or disclaimer of opinion. Save and except as disclosed below, their
      reports were not modified as to uncertainty, audit scope or accounting
      principles.





The
      financial statements audited by the Former Accountant for the fiscal years
      ended
      December 31, 2006 and 2005 contained a modified opinion because factors
      including the Company’s net loss and its not having obtained profitable
      operations raised substantial doubt that the Company would be able to continue
      as a going concern.





The
      decision to change certifying accountants was approved by resolution of the
      directors of the Company effective the 6th day of December 2007.





For
      either of the past two years and to the date of the change in certifying
      accountant, there were no reportable events as described in Regulation S-K
      229.304(a)(1)(v). There were no disagreements, for either of the past two years
      and to the date of the change of certifying accountant, with the Former
      Accountant on any matter of accounting principles or practices, financial
      statement disclosure or auditing scope or procedure of any kind, including
      any
      which, if not resolved to the Former Accountant’s satisfaction, would have
      caused it to make reference to the subject matter of the disagreement(s) in
      connection with its report.





The
      Former Accountant was not, prior to its appointment or in the previous two
      most
      recent fiscal years of the Company, consulted by the Company as to the
      application of accounting principles to a specific completed or contemplated
      transaction, or the type of audit opinion that might be rendered on the
      Company’s financial statements and neither written nor oral advice was provided
      that was an important factor considered by the Company in reaching a decision
      as
      to the accounting for an auditing or financial reporting issue.


19


**ITEM
      9A. 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 primarily due to results of adjustments made to our financial
        statements by our external auditors in performing their audit of our financial
        statements as of and for the year ended December 31, 2007. 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. Such material weaknesses, as well
        as
        our remediation efforts, are further described below.





**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 Framework* issued
        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, 2007.





In
        performing this assessment, management identified the following material
        weaknesses: absence of adequate segregation of duties relating to oversight
        and
        management of our systems. Our controller who is an outside consultant performs
        substantially all of our bookkeeping functions and preparation of financial
        statements and due to a lack of resources, oftentimes her work process and
        product are not monitored by other qualified management team members. The
        absence of such adequate segregation of duties may have an affect on the
        systems
        which we use in the evaluation and processing of certain accounts and areas
        and
        in the posting and recording of journal entries into certain accounts, most
        notably, our year-end financial statement closing process and debt management
        process.





In
        light
        of the conclusion that our internal control over financial reporting was
        not
        effective, our management is in the process of implementing a plan intended
        to
        remediate such ineffectiveness and to strengthen our internal controls over
        financial reporting 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 have begun these
                  improvements and expect them to be
                  on-going.


2.
              The
                  segregation of duties relating to the processing of accounts and
                  the
                  recording of journal entries into certain accounts.


3.
              Retaining
                  the services of an experienced chief financial officer to enhance
                  our
                  financial reporting capabilities.


4.
              Establishing
                  an audit committee comprised of independent directors.





While
        our
        management continues to evaluate the cost of these remediation efforts, we
        initially estimate the costs for additional resources may be in excess of
        $300,000 per year.


20


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**





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, 2007 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
      October 7, 2007, we issued 1,083,334 units of our securities to
      accredited investors at a price of $0.60 per unit, for net proceeds of
      $650,000. Each unit consisting of one share of our 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. We offered and sold
      our securities 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
      October 2, 2007, we issued convertible notes to accredited investors for
      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 our common
      stock at a rate of $0.60 per share. We 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. We offered and sold the convertible notes 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
      November 6, 2007, we issued convertible notes to accredited investors for
      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 our common stock at a rate of $0.60 per
      unit, each unit consisting of one share of our 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. We offered and sold the convertible notes 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
      November 20, 2007, we issued convertible notes to accredited investors for
      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 our common stock at a rate of $0.60 per
      unit, each unit consisting of one share of our 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. We offered and sold the convertible notes 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.


21


On
      November 26, 2007, we issued convertible notes to accredited investors for
      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 our common stock 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. We offered and sold the convertible notes 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.





Subsequent
      to our fiscal year ended December 31, 2007, from March 3 through March 25,
      2008,
      we issued convertible notes to accredited investors for aggregate proceeds
      of $550,000. The amount of each note is unsecured and is due in two years.
      The
      principal amount of each note 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 $0.60 per share. We also issued a warrant to purchase 916,668
      shares of our common stock in relation to these notes, expiring in two years.
      Each warrant is exercisable at $0.60 for the first year and at $0.90 for the
      second year. We offered and sold the convertible notes and warrants 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.





Further,
      subsequent to our fiscal year ended December 31, 2007, o n
      March
      19, 2008, we issued and sold to accredited investors 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. We offered and sold our
      securities 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.




All
      the
      above offers, issuances and sales were made to accredited investors as defined
      in Rule 501(a) under the Securities Act, no general solicitation was made by
      the
      Company or any person acting on our behalf; the securities sold were subject
      to
      transfer restrictions, and the certificates for those shares contained an
      appropriate legend stating they had not been registered under the Securities
      Act
      and may not be offered or sold absent registration or pursuant to an exemption
      therefrom.





Amendment
      to Agreements




Subsequent
      to our fiscal year ended December 31, 2007, we entered into an amendment
      agreement with Muddy whereby certain of our payment obligations were extended,
      including the final payment to Muddy of $3,250,000 to on or before June 1,
      2008.
      Additionally, the parties agreed to extend the entering of a definitive
      agreement to on or before May 1, 2008.




Further
      subsequent to our fiscal year ended December 31, 2007, we entered into an
      amendment agreement with Geochem whereby certain of our payment obligations
      were
      extended, including the final payment to Geochem of $200,000 to on or before
      May
      15, 2008. Additionally, the parties agreed to extend the entering of a
      definitive agreement to on or before May 15, 2008.


22


**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**
            
            **Position**Walter
                Merschat
            
            62
            
            Chairman
                of the Board; President, Chief Financial Officer and
                SecretaryChris
                D. Wright
            
            50
            
            DirectorJon
                Clement Nicolaysen
            
            61
            
            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.




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.




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.


23


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





Based
      solely upon a review of Forms 3, 4 and 5 delivered to us as filed with the
      Securities Exchange Commission, each of our former President and Director,
      Gregory Leigh Lyons and former President and current Director, Chris D. Wright
      failed to file on a timely basis a Form 3 as required pursuant to Section
      16(a) of the Securities Exchange Act. Mr. Lyons and Mr. Wright each had one
      late
      report during the fiscal year ended December 31, 2007. Further, subsequent
      to
      our fiscal year ended December 31, 2007, our current President, Walter Merschat,
      and Directors, Jon Nicolaysen and Mr. Wright, each failed to file on a timely
      basis a Form 4 as required pursuant to Section 16(a) of the Securities Exchange
      Act.





Except
      as
      set forth above, 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**





Given
      our
      limited operations and resources and because we are in the exploration stage,
      we
      have not yet adopted a code of ethics. Upon commencement of significant
      operations and hiring other executive officers, we intend to adopt a code of
      ethics that will apply to all our employees.





**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, 2007 and December 31,
      2006. Other than as set forth below, no executive officer’s total annual
      compensation exceeded $100,000 during our last fiscal period.


24


**Summary
      Compensation Table**


Name and Principal Position
              
              
              
              Year
              
              Salary
              
              Bonus
              
              Stock
                Awards
              
              Option
                Awards
              
              Non-Equity
                Incentive Plan
                Compensation
              
              Non-qualified
                Deferred
                Compensation
                Earnings
              
              All Other
                Compensation
              
              Total
                $Gregory
                  Leigh Lyons(1)Former
                  President, Secretary,Treasurer
                  and Director
              
              
              
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              2,500
              
              $
              2,500Chris.
                  D. Wright(2)Director
                  and former President
              
              
              
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              15,000
              
              $
              15,000Dennis
                  Mee(3)Former
                  President, ChiefFinancial
                  Officer, Secretary,Treasurer
                  and Director
              
              
              
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              29,680
              
              $
              29,680Alan
                  Charuk(4)Former
                  President and Director
              
              
              
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              -Sam
                  Hirji(5)Former
                  President, ChiefExecutive
                  Officer and Director
              
              
              
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              -2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              -Herbert
                  MoellerFormer
                  Chief Financial
              
              
              (6)Officer,
                  Secretary, Treasurer and Director
              
              
              
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              -2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              -


(1)
            Mr.
                Lyons resigned as our President, Secretary and Treasurer on January
                29,
                2008 and from our Board on February 6, 2008.


(2)
            Mr.
                Wright resigned as our President on December 7,
                2007.


(3)
            Mr.
                Mee resigned as our President on August 23, 2007 and as our Chief
                Financial Officer, Secretary, Treasurer and Director on December
                27,
                2007.


(4)
            Mr.
                Charuk resigned as our President and Director on August 17,
                2007.


(5)
            Mr.
                Hirji resigned as our President, Chief Executive Officer and Director
                on
                June 15, 2007.


(6)
            Mr.
                Moeller resigned as our Chief Financial Officer, Secretary, Treasurer
                and
                Director on May 28, 2007.





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.


25


**Director
      Compensation**





Our
      board
      of 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, 2007 and 2006.





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




The
      following table sets forth, as of February 14, 2008, 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 Class**Common
                Stock
            
            
            Walter
                Merschat(3)
            
            
            4,000,000
            (5)
            
            7.46
            %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 directors and officers as a group
            
            
            12,000,000
            
            
            22.38
            %





(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 1stAve., 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.


26


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




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 former directors and officers, Alan Charuk, Harvey Price,
      James Charuk and Charles Bloomquist, receive 26,000,000 shares of our common
      stock valued at $26,000. Alan Charuk is a principal shareholder and officer
      of
      CBM, and Mr. Price, James Charuk and Mr. Bloomquist are affiliates of CBM.
      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, (i) 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, (ii) CBM repaid to us $26,000
      of a deposit, and (iii) we forgave the remaining $74,000 of the deposit
      previously provided to CBM.





We
      entered into a consulting agreement with our former President, Secretary,
      Treasurer and Director effective December 1, 2007, to provide us with corporate
      management and governance services. We agreed to pay Mr. Lyons a monthly fee
      of
      $2,500. The agreement was terminated in January 2008.





We
      entered into a consulting agreement with our former President and Director
      effective September 1, 2007, to provide us with corporate management and
      governance services. We agreed to pay Mr. Wright a monthly fee of $5,000. The
      agreement was terminated in November 2007.





We
      entered into a consulting agreement with our former Chief Financial Officer,
      Secretary, Treasurer and Director effective May 28, 2007, to provide us with
      corporate management and governance services. We agreed to pay Mr. Mee a monthly
      fee of $4,000 plus applicable taxes. The agreement was terminated in December
      2007.





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, the Company
      entered into an agreement to acquire such interest for $5,000,000. Mr.
      Merschat’s interest if the Company concludes the acquisition would be
      approximately $2,500,000. 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 November 19,
      2007, the Company entered into an agreement to acquire such interest for
      $400,000. Mr. Merschat’s interest if the Company concludes the acquisition would
      be approximately $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 to acquire such interest for $5,000,000. Mr.
      Nicolaysen’s interest if the Company concludes the acquisition would be
      approximately $2,500,000.




**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, 2007**
              
              **December 31, 2006**Audit
                  Fees
              
              $
              12,490
              
              $
              6,019Audit
                  — Related Fees
              
              
              —
              
              
              —Tax
                  Fees
              
              
              —
              
              
              —All
                  Other Fees
              
              
              —
              
              
              —Total
              
              $
              12,490
              
              $
              6,019


27


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, 2007**
                
                **December 31, 2006**Audit
                    Fees
                
                $
                15,000
                
                $
                —Audit
                    — 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





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 2007. 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%.


28


**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.10.2(4)
              
              Letter
                  of Intent dated November 13, 2007 between Ameriwest Energy Corp.
                  and
                  Geochem Exploration, LLC.10.3(6)
              
              Management
                  and governance consultant agreement between Ameriwest Energy Corp.
                  and
                  Sound Energy Advisors LLC, dated December 21, 2007.10.4(6)
              
              Settlement
                  Agreement dated January 14, 200810.5(6)
              
              Settlement
                  Agreement dated January 23, 200810.6(6)
              
              Settlement
                  Agreement dated January 23, 200810.7(6)
              
              Finder’s
                  Fee Agreement dated March 1, 200816(5)
              
              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 November 19, 2007.(5)
              incorporated
                  herein by reference to exhibits previously filed on Registrant’s Current
                  Report on Form 8-K, filed on December 6, 2007.(6)
              incorporated
                  herein by reference to exhibits previously filed on Registrant’s Annual
                  Report on Form 10-K, filed on April 15,
                  2008.


29


**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:
                  August 25, 2008
              /s/*Walter
                  Merschat*By:
                  Walter MerschatIts:
                  President and Chairman of the Board (Principal ExecutiveOfficer)Dated:
                  August 25, 2008
              /s/***Joseph
                  J. McQuade*By:
                  Joseph J. McQuadeIts:
                  Chief Financial Officer (Principal Financial Officer andPrincipal
                  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
                  Mershat*
              
              Director
              
              August
                  25, 2008Walter
                  Merschat/s/*Chris
                  D. Wright*
              
              Director
              
              August
                  25, 2008Chris
                  D. Wright/s/*Jon
                  Clement Nicolaysen*
              
              Director
              
              August
                  25, 2008Jon
                  Clement Nicolaysen


30


**Ameriwest
      Energy Corp.**


**Index
      to Financial Statements**


**December
      31, 2007**





**INDEX**





**Page**Independent
                Registered Public Accounting Firms’ Reports
            F-2Financial
                StatementsConsolidated
                Balance Sheets
            F-3Consolidated
                Statements of Operations
            F-4Consolidated
                Statements of Cash Flows
            F-5Consolidated
                Statements of Stockholder’s Deficiency
            F-6Notes
                to Consolidated Financial Statements
            F-7


31


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Stockholders


Ameriwest
      Energy Corp. (Formerly South Sea Energy Corp.)


Casper,
      Wyoming





We
      have
      audited the accompanying balance sheet of Ameriwest Energy Corp. (Formerly
      South
      Seas Energy Corp.) (An Exploration Stage Company) as of December 31, 2007,
      and
      the related statement of operations, stockholder’s equity and cash flows for the
      year then ended. These financial statements are the responsibility of the
      Company's management. Our responsibility is to express an opinion on these
      financial statements based on our audit.





The
      financial statements for the period January 3, 2001 (Date of Inception) through
      December 31, 2006, were audited by other auditors whose report expressed an
      unqualified opinion on those statements. The financial statements for the period
      January 3, 2001 (Date of Inception) through December 31, 2006, include total
      expenses and net loss of $159,101. Our opinion on the statements of operations,
      stockholders' equity (deficit), and cash flows for the period January 3, 2001
      (Date of Inception) through December 31, 2007, insofar as it relates to amounts
      for prior periods through December 31, 2006, is based solely on the report
      of
      other auditors.





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 audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. 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 also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      consolidated financial statement presentation. We believe that our audit
      provides a reasonable basis for our opinion.





In
        our
        opinion, based
        on
        our audit and the report of the other auditors, the
        financial statements referred to above present fairly, in all material respects,
        the financial position of Ameriwest Energy Corp. (Formerly South Sea Energy
        Corp.) as of December 31, 2007, and the results of its operations and cash
        flows
        for the year ended
        December 31, 2007 and for the period from January 3, 2001 (Date of Inception)
        through December 31, 2007, in
        conformity with accounting principles generally accepted in the United States
        of
        America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 3 to the financial
      statements, the Company has suffered recurring losses from operations and has
      a
      working capital deficiency, which raises substantial doubt about its ability
      to
      continue as a going concern. Management's plans regarding these matters also
      are
      described in Note 3. 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
      11,
      2008


F-1


**Report
      of Independent Registered Public Accounting Firm**





To
      The
      Board of Directors


of
      Henley
      Ventures, Inc.:





We
      have
      audited the accompanying balance sheet of Henley Ventures, Inc. as of December
      31, 2006, and the related statements of operations, stockholders’ deficit, and
      cash flows for the years ended December 31, 2006 and 2005 and for the period
      from January 3, 2001 (inception) through December 31, 2006. These financial
      statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audits.





We
      conducted our audits in accordance with the 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 misstatement. 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 statements 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 Henley Ventures, Inc. as of
      December 31, 2006, and the results of its operations and its cash flows for
      the
      years ended December 31, 2006 and 2005 and for the period from January 3, 2001
      (inception) through December 31, 2006 in conformity with generally accepted
      accounting principles.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. As discussed in Note 1 to the financial statements,
      the Company’s significant operating losses raise substantial doubt about its
      ability to continue as a going concern. The financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.




CORDOVANO AND HONECK LLP




Cordovano
      and Honeck, LLP


Englewood,
      Colorado


March
      21,
      2007


F-2






**Ameriwest
      Energy Corp.**


***(Formerly
      South Sea Energy Corp.)***


**(An
      Exploration Stage Company)**


**Balance
      Sheets**





**December 31, 2007**
            
            **December 31, 2006****ASSETS****Current**Cash
            
            $
            245
            
            $
            -Prepaid
                expenses and deposit
            
            
            10,355
            
            
            1,500**Total
                current assets**
            
            
            10,600
            
            
            1,500**Deferred
                acquisition costs**
            
            
            1,758,653
            
            
            -**Total
                assets**
            
            $
            1,769,253
            
            $
            1,500**LIABILITIES
                and SHAREHOLDERS' EQUITY****Current**Bank
                overdraft
            
            $
            -
            
            $
            68Accounts
                payable and accrued liabilities
            
            
            753,640
            
            
            26,299Indebtedness
                to related parties
            
            
            -
            
            
            36,047Interest
                on convertible notes
            
            
            26,968
            
            
            -Current
                portion of convertible notes, net of discount
            
            
            456,946
            
            
            -**Total
                current liabilities**
            
            
            1,237,554
            
            
            62,414**Long
                term portion of convertible notes**
            
            $
            61,560
            
            
            -**STOCKHOLDERS'
                EQUITY**Capital
                stock 720,000,000 common stock authorized, $0.001 par value 53,611,334
                shares issued and outstanding
            
            
            53,611
            
            
            46,980Additional
                paid-in capital
            
            
            1,390,980
            
            
            51,207Deficit
                accumulated during exploration stage
            
            
            (974,452
            )
            
            (159,101
            )**Total
                stockholders' equity (deficit)**
            
            
            470,139
            
            
            (60,914
            )**Total
                liabilities and stockholders' equity (deficit)**
            
            $
            1,769,253
            
            $
            1,500





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


F-3





**Ameriwest
      Energy Corp.**


***(Formerly
      South Sea Energy Corp.)***


**(An
      Exploration Stage Company)**


**Statements
      of Operations**


**For
      the Years Ended December 31, 2007 and 2006**


**And
      for the Period from January 3, 2001 [Inception] to December 31,
      2007**





**Cumulative from****January 3, 2001****December 31,**
            
            **[Inception] to****2007**
            
            **2006**
            
            **December 31, 2007****Expenses**Contribution
                rent
            
            
            1,650
            
            
            6,600
            
            
            41,250Contribution
                services
            
            
            5,534
            
            
            7,523
            
            
            45,621Executive
                compensation
            
            
            49,214
            
            
            -
            
            
            49,214Acquisition
                and exploration costs
            
            
            183,230
            
            
            5,770
            
            
            201,695Interest,
                accretion of discount and beneficial conversion onconvertible
                notes
            
            
            254,768
            
            
            -
            
            
            254,768Marketing
                and investor relations
            
            
            148,276
            
            
            -
            
            
            148,276Organization
                costs
            
            
            -
            
            
            -
            
            
            1,845Office,
                general and administrative expenses
            
            
            36,789
            
            
            1,833
            
            
            43,363Professional
                fees
            
            
            135,890
            
            
            13,344
            
            
            188,420Net
                loss for the period
            
            $
            (815,351
            )
            $
            (35,070
            )
            $
            (974,452
            )





**Loss
                per share - basic and diluted**
            
            **$**
            **(0.01**
            **)**
            **$**
            **(0.00**
            **)****Weighted
                Average Shares Outstanding**
            
            
            **54,903,262**
            
            
            **46,980,000**





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




F-4


Ameriwest
        Energy Corp.
 (Formerly
        South Sea Energy Corp.)
 (An
        Exploration Stage Company)
 Statements
        of Cash Flows
 For
        the
        Years Ended December 31, 2007 and 2006
 **And
        for the Period from January 3, 2001 [Inception] to December 31,
        2007**


**December 31,**
              
              **Cumulative from January 3,**
                **2001 [Inception] to****2007**
              
              **2006**
              
              **December 31, 2007****Cash
                  Flows from (used in) Operating Activities**Net
                  loss from operations
              
              $
              (815,351
              )
              $
              (35,070
              )
              $
              (974,452
              )Items
                  not affecting cash:-write-off
                  of deferred acquisition costs
              
              
              183,230
              
              
              -
              
              
              183,230-contributed
                  rent and services
              
              
              7,184
              
              
              14,123
              
              
              86,871-interest
                  and fees accrued for convertible notes
              
              
              254,768
              
              
              -
              
              
              254,768Changes
                  in non-cash working capital balances related to operations:-
                  cash overdraft
              
              
              (68
              )
              
              68
              
              
              --prepaid
                  expenses and deposits
              
              
              (8,855
              )
              
              (1,200
              )
              
              (10,355
              )-accounts
                  payable and accrued expenses
              
              
              727,340
              
              
              7,183
              
              
              753,639**Cash
                  Flows Provided by (Used in) - Operating
                  Activities**
              
              
              348,248
              
              
              (14,896
              )
              
              293,701**Cash
                  flows from (used in) Investing Activities**Cash
                  refunded for deferred acquisition costs
              
              
              26,000
              
              
              -
              
              
              26,000Deferred
                  acquisition costs
              
              
              (1,967,883
              )
              
              -
              
              
              (1,967,883
              )**Cash
                  Flows Provided by (Used in) - Investing Activities**
              
              
              (1,941,883
              )
              
              -
              
              
              (1,941,883
              )**Cash
                  flows from Financing Activities**Proceeds
                  from convertible notes
              
              
              956,946
              
              
              -
              
              
              956,946Proceeds
                  from related party debt
              
              
              (36,047
              )
              
              12,976
              
              
              -Proceeds
                  from issue of common stock
              
              
              672,980
              
              
              -
              
              
              691,480**Cash
                  Flows Provided by (Used in) - Financing Activities**
              
              
              1,593,879
              
              
              12,976
              
              
              1,648,426**Net
                  increase (decrease) in cash**
              
              
              245
              
              
              (1,920
              )
              
              245**Cash,
                  beginning of period**
              
              
              -
              
              
              1,920
              
              
              -**Cash,
                  end of period**
              
              **$**
              **245**
              
              **$**
              **-**
              
              **$**
              **245****SUPPLEMENTAL
                  CASH DISCLOSURES**Cash
                  paid for:Income
                  taxes
              
              **$**
              **-**
              
              **$**
              -
              
              **$**
              -Interest
              
              **$**
              **-**
              
              **$**
              -
              
              **$**
              -


The
        accompanying notes are an integral part of these audited financial
        statements.
  F-5




**Ameriwest
      Energy Corp.**


***(Formerly
      South Sea Energy Corp.)***


**(An
      Exploration Stage Company)**


**Statement
      of Shareholders' Equity (Deficit)**


**For
      the period from January 3, 2001 [Inception] to December 31,
      2007**





**Deficit**
              **Accumulated****Additional**
            
            **during**
            
            **Total****Common
                Stock**
            
            **Paid-In**
            
            **Exploration**
            
            **Stockholders'****Shares**
            
            **Amount**
            
            **Capital**
            
            **Stage**
            
            **Equity****Balance,
                  at inception**
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Stock
                issued to founders
            
            
            11,340,000
            
            
            11,340
            
            
            (7,840
            )
            
            
            
            
            3,500Contributed
                rent and services
            
            
            
            
            
            
            
            
            12,862
            
            
            
            
            
            12,862Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            (21,666
            )
            
            (21,666
            )**Balance,
                December 31, 2001**
            
            
            11,340,000
            
            
            11,340
            
            
            5,022
            
            
            (21,666
            )
            
            (5,304
            )Contributed
                rent and services
            
            
            
            
            
            
            
            
            13,028
            
            
            
            
            
            13,028Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            (20,138
            )
            
            (20,138
            )**Balance,
                December 31, 2002**
            
            
            11,340,000
            
            
            11,340
            
            
            18,050
            
            
            (41,804
            )
            
            (12,414
            )Contributed
                rent and services
            
            
            
            
            
            
            
            
            13,050
            
            
            
            
            
            13,050Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            (15,961
            )
            
            (15,961
            )**Balance,
                December 31, 2003**
            
            
            11,340,000
            
            
            11,340
            
            
            31,100
            
            
            (57,765
            )
            
            (15,325
            )Stock
                issued for cash at $0.01, net of offering costs of $2,500
            
            
            32,400,000
            
            
            32,400
            
            
            (24,900
            )
            
            
            
            
            7,500Stock
                issued for cash at $0.10, net of offering costs of $2,500
            
            
            3,240,000
            
            
            3,240
            
            
            4,260
            
            
            
            
            
            7,500Contributed
                rent and services
            
            
            
            
            
            
            
            
            13,057
            
            
            
            
            
            13,057Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            (28,666
            )
            
            (28,666
            )**Balance,
                December 31, 2004**
            
            
            46,980,000
            
            
            46,980
            
            
            23,517
            
            
            (86,431
            )
            
            (15,934
            )Contributed
                rent and services
            
            
            
            
            
            
            
            
            13,567
            
            
            
            
            
            13,567Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            (37,600
            )
            
            (37,600
            )**Balance,
                December 31, 2005**
            
            
            46,980,000
            
            
            46,980
            
            
            37,084
            
            
            (124,031
            )
            
            (39,967
            )Contributed
                rent and services
            
            
            
            
            
            
            
            
            14,123
            
            
            
            
            
            14,123Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            (35,070
            )
            
            (35,070
            )**Balance,
                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**
            **)**
            
            **470,139**





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





F-6




Ameriwest
      Energy Corp.


(Formerly
      South Sea Energy Corp.)


(An
      Exploration Stage company)


Notes
      to
      Financial Statements


December
      31, 2007





**1.**
            **Nature
                of operations**





Ameriwest
      Energy Corp. (Formerly South Sea 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:





**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.





**Exploration
      stage company**


Ameriwest
      complies with Financial Accounting Standard Board Statement No. 7 for its
      characterization of Ameriwest as an Exploration Stage Company. Ameriwest is
      devoting substantially all of its present efforts to establish a new business
      and none of its planned principal operations have commenced.





**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:





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


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





**Income
      taxes**


Ameriwest
      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.


F-7


**Full
        cost method**


Ameriwest
        uses the full cost method of accounting for exploration and development
        activities as defined by the Statement of Financial Accounting Standards
        No. 69.
        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.





**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 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, 2007, we have capitalized $nil in oil and gas
        properties, which is subject to the ceiling test for impairment.





**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 no impairment losses in 2007 and 2006.





**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.





F-8




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.





**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.





**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, 2007, Ameriwest has not yet achieved profitable
      operations, has accumulated losses of $974,452 since its inception, has a
      working capital deficiency of $1,226,954 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**





**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.





**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.





F-9




**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.





**5.**
            **Mineral
                claims**





On
      July
      28, 2004, Ameriwest acquired a 100% interest in the mineral rights to the Red
      Bird claim, located 93 air miles northeast of Vancouver, British Columbia.





During
      the first quarter of the year ended December 31, 2007, Ameriwest acquired
      two additional mineral claims, called the Red Bird Protection and the Pleasant
      Surprise, located in the area surrounding the Red Bird claim. The claims were
      in
      good standing until September 30, 2007, but have lapsed as at December 31,
      2007.
      Ameriwest did not undertake any exploration in these three mineral claims.





**6.**
            **Oil
                and gas interests**





**East
      Kalimatan, Indonesia**


On
      June
      15, 2007, Ameriwest signed a letter of intent with CBM Asia Development Corp.,
      as amended, whereby it would acquire an interest in a participation agreement
      of
      a coal bed methane project in East Kalimatan, Indonesia for $100,000. The
      agreement also provided that the newly appointed directors and officers of
      Ameriwest would receive 26,000,000 shares of common stock of the
      Company.





The
      terms
      of the acquisition were subject to the parties closing the transaction no later
      than July 7, 2007. On August 17, 2007, Ameriwest 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 the now former
      directors and officers were returned to treasury for cancellation.





At
      December 31, 2007, related acquisition costs totaling $183,230 were written
      off.





**South
      Glenrock C Field, Wyoming**


On
        August
        24, 2007, Ameriwest entered into an assignment agreement with Pin Petroleum
        Partners Ltd, whereby Pin agreed to assign its rights and obligation under
        a
        letter of intent with Muddy Minerals, LLC, to a property referred to as the
        South Glenrock “C” Oil Field, located in Converse County, Wyoming for the
        aggregate sum of $550,000, which includes $500,000 in repayment of funds
        paid by
        Pin to Muddy Minerals LLC on behalf of Ameriwest.





Pursuant
        to the terms of the letter of intent Ameriwest assumed, Ameriwest agreed
        to
        acquire a 99.5% working interest together with a 78% net royalty interest
        in the
        property for the sum of $5,000,000, payable to Muddy Minerals LLC, as
        follows:





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


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


$1,000,000
      payable on or before October 1, 2007 (of which $500,000 was paid in October
      2007, and $250,000 was paid subsequent to year end);


$1,000,000
      payable on or before November 1, 2007 (past due)


$1,000,000
      payable on or before December 1, 2007 (past due); and


$1,000,000
      payable on or before January 4, 2008 (past due).





The
      terms
      of the acquisition are subject to the parties entering into a definitive
      agreement. As at December 31, 2007, $1,500,000 was paid to Muddy pursuant to
      the
      letter of intent, and another $250,000 was paid subsequent to year end.
      Ameriwest has accrued $550,000 payable to Pin pursuant to the
      Assignment.





F-10





During
      the year ended December 31, 2007, Ameriwest incurred $108,653 in deferred
      exploration costs associated with the preparation of reservoir evaluation.
      These
      costs are included in deferred acquisition costs on the balance sheet since
      the
      parties have not yet entered into a definitive agreement.





Subsequent
        to the fiscal year ended December 31, 2007, Ameriwest entered into an amendment
        agreement with Muddy whereby certain of Ameriwest’s payment obligations were
        extended, including the final payment to Muddy of $3,250,000 to on or before
        June 1, 2008.





Most
        of
        the oil and gas properties which are the subject of the letter of intent
        are
        non-producing. The terms of the acquisition, as amended, are subject to the
        parties entering into a definitive agreement on or before May 1, 2008. Since
        the
        parties have not yet entered into a definitive agreement, Ameriwest has not
        recorded obligations or accruals totaling $3,250,000, representing the unpaid
        amounts pursuant to the letter of intent, as amended.





**Skull
      Valley, Utah**


On
      November 6, 2007, Ameriwest signed a letter of intent with Geochem Exploration,
      LLC.., a Wyoming limited liability company, to acquire the right to purchase
      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 purchase price of $400,000, payable as follows:





$100,000
      payable upon execution of the LOI (paid);


$100,000
      payable upon the execution of the definitive agreement; and


$200,000
      payable on or before May 15, 2008.





The
        terms
        of the LOI, as amended on March 14, 2008, are subject to the parties entering
        into a definitive agreement on or before May 15, 2008 and completion of the
        due
        diligence by the same date. The oil and gas property which is the subject
        of the
        letter of intent is non-producing, and is not in the development
        stage.





As
      at
      December 31, 2007, the first payment of $100,000 was made to Geochem pursuant
      to
      the LOI. The parties have not yet entered into a definitive
      agreement.




Subsequent
        to the fiscal year ended December 31, 2007, Ameriwest entered into an amendment
        agreement with Geochem whereby certain of Ameriwest’s payment obligations were
        extended, including the final payment to Geochem of $200,000 to on or before
        May
        15, 2008. Additionally, the parties agreed to extend the entering of a
        definitive agreement to on or before May 15, 2008. Since the parties have
        not
        yet entered into a definitive agreement, Ameriwest has not recorded obligations
        or accruals totaling $300,000, representing the unpaid amounts pursuant to
        the
        letter of intent, as amended.




F-11






**7.**
            **Convertible
                notes**





Short-term
      convertible notes payable as of December 31, 2007 & 2006, consist of the
      following:





Description
            
            2007
            
            2006Convertible
                notes payable originating in 2007 with an original principal amount
                of
                $456,946, 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 of common stock and one warrant for the purchase of
                one share
                of common stock exercisable at $0.60 per share for the first year
                and
                $0.90 per share for the second year.
            
            $
            456,946
            
            
            -Less:
                discount attributable to beneficial conversion feature
            
            
            (166,240
            )
            
            -Add:
                Amortization of discount
            
            
            166,240Carrying
                value of short-term convertible notes
            
            $
            456,946
            
            $
            -





At
      December 31, 2007, Ameriwest accrued $19,571 in interest in relation to the
      notes.





Long-term
      convertible debt as of December 31, 2007 & 2006, consists of the
      following:





Description
            
            2007
            
            2006Convertible
                note payable originating in October 2007 with an original principal
                amount
                of $500,000, 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 a warrant to purchase 833,333
                shares
                of its common stock in connection with this note, expiring October
                2,
                2009. The warrants are exercisable at $0.60 for the first year and
                at
                $0.90 for the second year.
            
            $
            500,000
            
            $
            -Less:
                discount attributable to warrants and beneficial conversion
                feature
            
            
            (500,000
            )
            
            -Add:
                Accretion of discount
            
            
            61,560Carrying
                value of short-term convertible notes
            
            $
            61,560
            
            $
            -





At
      December 31, 2007, we accrued $7,397 in interest in relation to the note.





**Subsequent
      issuance**


Subsequent
      to the fiscal year ended December 31, 2007, from March 3 through March 25,
      2008,
      Ameriwest issued four convertible notes for aggregate proceeds of $550,000.
      The amount of each note is unsecured and is due in two years. The principal
      amount of each note 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 Ameriwest’s
      common stock at a rate of $0.60 per share. In relation to these notes, Ameriwest
      also issued a warrant to purchase 916,668 shares of its common stock, expiring
      in two years. The warrants are exercisable at $0.60 for the first year and
      at
      $0.90 for the second year.





Ameriwest
      evaluated the detachable warrants issued or issuable pursuant to these
      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-12





**8.**
            **Capital
                stock**





**Common
      stock**





Effective
      on December 15, 2006, Ameriwest forward split its issued common stock on the
      basis of 9 new for one old. The number of shares referred to in these financial
      statements has been restated wherever applicable to give retroactive effect
      on
      the forward stock splits. There was no effect on Ameriwest’s authorized share
      capital.





Effective
      on May 4, 2007, Ameriwest forward split its issued common stock on the basis
      of
      3.6 new for one old. The number of shares referred to in these financial
      statements has been restated wherever applicable to give retroactive effect
      on
      the forward stock split.





On
      May 4,
      2007, Ameriwest amended its authorized capital stock to 720,000,000 common
      shares with a par value of $0.001 per share. The number of authorized shares
      and
      the par value per share as referred to in these financial statements has been
      restated wherever applicable to give retroactive effect to this
      amendment.





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





On
      June
      15, 2007, Ameriwest issued 26,000,000 to officers and directors of Ameriwest
      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
      canceled.





On
      October 7, 2007, Ameriwest sold 1,083,334 units at a price of $0.60 per unit,
      for net proceeds of $650,000. 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 $32,500 associated with this private financing. The allocation
      of
      proceeds from the sale of the 1,083,334 capital stock units to the share
      purchase warrants based on the fair value of $553,640 was estimated using the
      Black Scholes stock price valuation model with the following assumptions: i)
      expected volatility of 119.09%; risk free interest rate of 3.32%; iii) expected
      weighted average life of 1 year; and iv) no dividend yield. The relative fair
      value allocated to the warrants amounted to $298,981 and the relative fair
      value
      assigned to the shares amounted to $351,018.





Subsequent
      to December 31, 2007, o n
      March
      19, 2008, Ameriwest sold 666,668 units
      at
      a price of $0.60 per unit, for net proceeds of $400,000. Each unit consist
      of
      one share of 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.





**Options**





On
      September 15, 2004, Ameriwest granted stock options to one of its directors
      whereby 100,000 common shares could be exercised at the price of $0.10 per
      shares on or before September 15, 2009 in whole or in part with a vesting at
      the
      rate of 25,000 options at the beginning of every three month period commencing
      September 15, 2004 while the director serves of Ameriwest. As a result of the
      forward splits, the number of options granted increased to 900,000 options
      on
      December 15, 2006, and to 3,240,000 options on May 4, 2007.





Pursuant
      to the option agreement, these options have been cancelled effective the date
      of
      the resignation of this director, being June 22, 2007.





**Warrants**





On
      October 2, 2007, Ameriwest received loan proceeds of $500,000, and issued 833,333
      warrants in connection with this note, expiring October 2, 2009. 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 $500,000 convertible note and
      corresponding issuance of 833,334 warrants based on the fair value of $427,390
      was estimated using the Black Scholes stock price valuation model with the
      following assumptions: i) expected volatility of 119.09%; risk free interest
      rate of 4.102%; iii) expected weighted average life of 1 year; and iv) no
      dividend yield. The relative fair value allocated to the warrants amounted
      to
      $230,426 and the relative fair value assigned to the shares amounted to
      $269,574.


F-13


On
      October 7, 2007, Ameriwest 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. The allocation of proceeds
      from the sale of the 1,083,334 capital stock units to the share purchase
      warrants based on the fair value of $553,640 was estimated using the Black
      Scholes stock price valuation model with the following assumptions: i) expected
      volatility of 119.09%; risk free interest rate of 3.32%; iii) expected weighted
      average life of 1 year; and iv) no dividend yield. The relative fair value
      of
      allocated to the warrants amounted to $298,981 and the relative fair value
      assigned to the shares amounted to $351,018.





At
      December 31, 2007, 1,083,334 warrants were outstanding, as follows:


WeightedNumber
              
              Average
              
              WeightedOutstanding as
              
              Remaining
              
              Average# of Warrants
              
              
              
              Exercise
              
              at December
              
              Contractual
              
              ExerciseIssued
              
              Expiry
              
              Price
              
              31, 2007
              
              Life
              
              PriceIssued, October 2, 2007
              
              
              833,333
              
              
              2-Oct-08
              
              $
              0.60
              
              
              833,333
              
              
              0.33
              
              $
              0.60Issued,
                  October 7, 2007
              
              
              1,083,334
              
              
              7-Oct-08
              
              $
              0.60
              
              
              1,083,334
              
              
              0.44
              
              $
              0.601,916,667
              
              
              
              
              
              
              
              
              1,916,667
              
              
              0.77
                  years
              
              $
              0.60


Subsequent
      to the fiscal year ended December 31, 2007, o n
      March
      19, 2008, Ameriwest issued and sold 666,668 units
      at
      a price of $0.60 per unit, for net proceeds of $400,000. Each unit consist
      of
      one share of 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.





Subsequent
      to the fiscal year ended December 31, 2007, from March 3 through March 25,
      2008,
      in connection with the issuances of convertible notes in the aggregate amount
      of
      $550,000, Ameriwest issued warrants to purchase 916,668 shares of
      Ameriwest’s common stock. The
      warrants are exercisable at $0.60 for the first year and at $0.90 for the second
      year.





**9.**
            **Related
                party transactions**





During
      the year ended December 31, 2007, Ameriwest incurred the following expenditures
      with former officers and directors:





·
            A
                former president, who was also a director, contributed the use of
                office
                space, including the use of telephone, to Ameriwest until April 1,
                2007.
                The contributed use of office space is included in the accompanying
                financial statements as contributed rent expense with a corresponding
                credit to additional paid-in capital in the amount of $1,650 for
                the year
                ended December 31, 2007;


·
            A
                former president, who was also a director, contributed management
                services
                to Ameriwest until April 1, 2007. The time and effort was recorded
                in the
                accompanying financial statements based on the prevailing rates for
                such
                services. The services are reported as contributed services with
                a
                corresponding credit to additional paid-in capital in the amount
                of $1,500
                for the year ended December 31,
                2007;


·
            From
                January 3, 2001 (date of inception) through March 31, 2007, former
                directors of Ameriwest paid certain organization costs, exploration
                costs
                and certain office expenses on behalf of Ameriwest, totaling $42,754.
                This
                balance was repaid in June 2007. Interest expense related to the
                balance
                unpaid at March 31, 2007 was computed at 5% per annum with a corresponding
                credit to additional paid-in capital in the amount of $534 for the
                year
                ended December 31, 2007;


F-14


·
            A
                former president, who was also a director, contributed management
                services
                to Ameriwest in June 2007. The time and effort was recorded in the
                accompanying financial statements based on the prevailing rates for
                such
                services. The services are reported as contributed services with
                a
                corresponding credit to additional paid-in capital in the amount
                of $3,500
                for the year ended December 31, 2007;


·
            Pursuant
                to a management services agreement, Ameriwest paid $29,680 to a former
                director during the year ended December 31,
                2007;


·
            Pursuant
                to a management services agreement, Ameriwest paid $15,000 to a former
                director during the year ended December 31,
                2007.





Effective
      December 1, 2007, Ameriwest entered into a contract with a company controlled
      by
      one of its directors for management and consulting services, requiring the
      payment of $2,500 per month, expiring on November 30, 2009. This commitment
      can
      be terminated by either party with 30 days’ written notice. This agreement was
      terminated in January 2008.





On
      August
      24, 2007, Ameriwest entered into an assignment agreement with Pin Petroleum
      Partners Ltd, whereby Pin agreed to assign its rights and obligation under
      a
      letter of intent with Muddy Minerals, LLC, a company wholly controlled by its
      president and director, and another director.





On
      November 6, 2007, Ameriwest signed a letter of intent with Geochem Exploration,
      LLC., a company wholly controlled by its President and a director.





**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, 2007, Ameriwest has accumulated net operating losses in the United
      States totaling approximately $974,452 which are available to reduce taxable
      income in future years and expire in 2026.





The
      significant components of Ameriwest’s deferred tax assets as of December 31,
      2007 & 2006 are as follows:





2007
            
            2006Deferred
                tax assetsNet
                operating loss carryforward
            
            $
            341,058
            
            $
            55,685Less:
                valuation allowance
            
            
            (341,058
            )
            
            (55,685
            )$
            -
            
            $
            -





The
      change in the valuation allowance for the year ended December 31, 2007 and
      2006
      was $285,373 and $12,275 respectively.





**11.**
            **Commitments**





On
      June
      15, 2007, Ameriwest entered into a one year contract for marketing and
      communications consulting services. In consideration, Ameriwest will pay a
      monthly retainer of $5,000 per month to cover fees as invoiced. This commitment
      can be terminated by either party with 30 days’ written notice;


F-15





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;





Effective
      December 1, 2007, Ameriwest entered into a contract with a company controlled
      by
      one of its directors for management and consulting services, requiring the
      payment of $2,500 per month, expiring on November 30, 2009. This commitment
      can
      be terminated by either party with 30 days’ written notice. This agreement was
      terminated in January 2008.


F-16